Bankruptcy Dubbo, Just what is the Deal with Debts?

Just what Debts are cleared away if I go Bankrupt?

The straightforward answer is that when it concerns Bankruptcy most debts are wiped, and I have featured a summary below for you to look at.

But, put simply some of the exceptions are Centrelink Debts, Child Support, Court fines (like speeding fines) and also any debts arising from uninsured Motor-vehicle claims and educational debts for example, HECS or FEE-HELP. These debts are not eliminated when you file for bankruptcy.

What about Secured Debts?

A secured debt is a vehicle loan or a home loan; it is a debt that has some real security linked to it. So as an example if you buy a new car for $40,000 dollars the security for that car is the actual car itself.

So, can my secured debts be erased if I file for bankruptcy?

Yes. If you have a car loan for $40,000 you can have that debt removed if you simply return the car. So the lesson is that you cannot have your cake and eat it too (so to speak), so yes all of your secured debts can be wiped but the asset needs to be sold or returned. This is just one facet that, when it comes to Bankruptcy, it is important to get professional guidance - like that readily available at Bankruptcy Experts Dubbo.

What about my Tax Debts with the ATO can they be eliminated If I go bankrupt?

Yes they can, both business and personal debts owing to the ATO can be wiped out with bankruptcy. If you have a business with any type of debts find some advice because it is not always so simple. Feel free to call us here at Bankruptcy Experts Dubbo if you have any questions on 1300 795 575. Or feel free to explore our website: www.bankruptcyexpertsDubbo.com.au

What about my business or Company debts?

Sometimes when it involves Bankruptcy we can help you with your business debts, call us about this first. Remember bankruptcy applies to an individual not companies, trusts or businesses. Generally you may need to liquidate a company to deal with the debt this way. When it comes to Bankruptcy, it can be a complicated area, so remember there are implications for a business owner such as insolvent trading. At Bankruptcy Experts Dubbo we specialise in business and personal debts so give us a call here at Bankruptcy Experts Dubbo if you have any questions regarding Bankruptcy on 1300 795 575. Or feel free to explore our website: www.bankruptcyexpertsDubbo.com.au

Bankruptcy, Will I lose my Superannuation?

Bankruptcy in Australia can be convoluted and difficult to understand. A question we often get asked here at Bankruptcy Experts Dubbo is 'what happens to my super if I declare Bankruptcy'? The solution for most is easy, if your super is normally in a regulated fund or industry fund like Sunsuper or Host Plus then nothing at all happens; your super is 100 % safe when it involves Bankruptcy.

What if I have a Self Managed Super Fund?

This is a growing concern, think about the growing number of members of Self-Managed Super Funds ("SMSFs") in the last few years; the ATO tells us it has increased Australia-wide from 758,589 in 2009 to 1,011,689 in 2014. So what happens to these Superfunds when it concerns Bankruptcy?

Remember Bankruptcy Experts Dubbo is not proposing this post is the complete story, if you have any questions feel free to consult with us on 1300 795 575. Whether or not you call us or someone else it doesn't matter, just please don't walk into bankruptcy blind when it comes to your SMSF actually we recommend you find both legal and financial advice before proceeding with any of the actions proposed in this article.

What is a Disqualified Person?

First and foremost, if you are thinking about Bankruptcy, you can not be a part of a SMSF. Why? Because if you are facing bankruptcy, you will be identified as a 'disqualified person'. And a disqualified individual cannot operate as an Individual Trustee. This poses a problem because usually most of the SMSFs are just 2 people, which means both of these members will need to also be the individual trustees. The position of trustee presents a lot of legal rules, and if you are in this position I would highly urge you to get familiar with them all-- including the fact that you can not 'know or suspect' that one of you are bankrupt. So you can see how an individual bankruptcy can be rather damaging to a SMSF and as you can assume the process of Bankruptcy for a SMSF is rather convoluted.

How long do I have so as to restructure my SMSF Fund once I'm bankrupt?

So what takes effect if one of the members of an SMSF does enter Bankruptcy?

For starters, the SMSF will need to be reorganized. This means that you will want to consider your overall structure and ensure it is meeting the basic conditions, including having a new trustee that is not experiencing issues with Bankruptcy. The Australian Tax office will offer you a 6 month 'grace period' to get this done before you face penalties. And consider, sometimes the absolute best plan would be to simply roll the fund into an industry or corporate fund.

Beyond these large scale reorganizing issues, there is a lot of paperwork to deal with too, and you need to be constantly keeping the ATO informed of what is happening. This suggests you will need to let them know that you have a bankruptcy concern with your current trustee, that they are being removed as soon as possible know who the new trustee/director is. The Bankrupt will also have to inform the ATO using the form NAT 3036 (Found on the ATO website) and they will need to also notify ASIC of their resignation.

Over that 6 month period you will need to remove the Bankrupt from the SMSF-- including their property and assets. Remember if you are not sure call Bankruptcy Experts Dubbo for some free advice on 1300 795 575.

What if I use a single member fund?

If you are a single member fund, then you will have to appoint a new director, and it will then end up being their duty to oversee the sale and relocation of assets into a managed fund. If there are two or more members, than the bankrupt member will have to resign and the other member will take away the property and halve the proceeds. They would then have to decide if they want to remain as a single member SMSF, or if they would like to roll everything into a managed fund. If both members are entering bankruptcy, then they would need to sell all assets as soon as possible and move the liquid assets to the managed fund.

From that you can see how when it comes to Bankruptcy, even when one single member is running into issues, it can affect the very existence of an SMSF. If you are at the moment facing this concern yourself, or with a partner in a SMSF, please seek financial advice to make certain you are meeting the ATO requirements.

A simple solution ...

As I recommended earlier, a straightforward solution to your SMSF situation is to put your super back into a normal regulated managed fund prior to bankruptcy and save yourself all the frustrations outlined above. Bankruptcy is never easy, but receiving proper advice is the best first step. If you want to discuss your options further, contact us at Bankruptcy Experts Dubbo or visit our website: www.bankruptcyexpertsDubbo.com.au or just call us on 1300 795 575.

Bankruptcy in Dubbo - Will I lose my house if I go bankrupt?

Bankruptcy Dubbo is a tricky process, but I know from meeting with thousands facing the likelihood of bankruptcy over the years, that not much worries people more than the notion of losing the family home. Almost everyone is sentimentally connected to their home - it's where the kids have grown, it's where you enjoy life on a day to day basis.

Will you lose your home if you go bankrupt? The solution is a resounding maybe. (not very useful, I know) People generally assume it's an inevitable consequence and a part of Bankruptcy, and therefore push themselves to the brink of insanity to not lose the family home. But when it comes to the whole process of Bankruptcy, a key benefit of Debt Agreements and Personal Insolvency Agreements is you can keep your house. The reason is simple: you've accepted to pay back the debt you are in.

So how is it possible to keep my Dubbo house, you ask? It's easier if I explain the basic concept behind the Bankruptcy process as administered by the trustee, then you'll have a more clear picture.

The job of the bankruptcy trustee is to firstly agree to the regulation of the bankruptcy act 1966 (it's a very boring read about 600 pages if you are wondering).

Within that regulatory framework, the trustee is to help recuperate monies owed to your creditors, that is carried out in a bunch of assorted ways but it mainly comes down to income and assets. The trustees role is to collect payments beyond your income threshold. The further role is to sell any assets that can contribute to paying your debts.

What this sounds like is that yes the trustee will sell your house right? Not normally. The only reason the trustee will sell off any asset including your house is to get money to pay back your debts. If there is no equity on your property then it's pointless to sell your home. This is happening more and more since the GFC as house prices in many areas have been heading south so what you paid 4 years ago may not necessarily reflect the price today.

A quick word of advice here if you have a house in Dubbo and are looking at Bankruptcy: get a qualified professional to help you through this process, there are loads of variables in these scenarios that have to be considered.

You might wonder, why would the bank want bankrupt clients? wouldn't they need to sell your house and not take the risk? The bank that has generously lent you the money for your house is making good money every month in interest out of you, month in month out, just as long as you keep up to date with your monthly payments then the bank really wants you in there at all costs. Ultimately however it's not the bank's call if the trustee determines that there is ample equity in your house the trustee will force you and the bank to sell the house.

When you file for bankruptcy you are asked to note the value of your house and the amount you owe on the house. A tip if you are attempting to work out the value of your house: use a registered valuer as this will offer you peace of mind, don't use your neighbours' gut feel suggestions or a real estate agents advice to get to this figure. When you get a valuer out to your house, see to it you tell the valuer to value the property for a quick sale, make certain you mow the lawn and don't leave the kitchen in a mess also.

Valuers used to offer two valuations: one for a quick sale and one for a well marketed non time delicate sale. Nowadays that's not the case, but if you meet them and tell them you need to sell the house in the next 30 days you may control the result. The idea is that you want a sensible sell now figure.

There are two main reasons this valuation process is critical to you: one you will likely have peace of mind ascertaining the market value of your house, and after that you can easily set up your equity position. The second thing is, your home may be really worth much more than you thought. Get some suggestions before doing this. The number of times I've met clients that have sold their family home of 20 years just to figure out I could of helped them keep it; unfortunately this happens all too often

When it comes to Bankruptcy and houses, another primary consideration is ownership, in many cases houses are bought in joint names. To puts it simply a couple may be a house 50/50 using both incomes to make the payments. If one party declares bankruptcy and the other party doesn't, the equity is only factored on the 50 % of the property.

When it comes down to Bankruptcy, this is just one of likely numerous scenarios that are likely when it comes to the family home. Bear in mind the non-bankrupt party can buy the bankrupt's part of the house in bankruptcy also. I should repeat this but get some advice on this area of Bankruptcy because it is very tricky and every single case is different.

If you would like to learn more about what to do, where to turn and what questions to ask about Bankruptcy, then feel free to get in touch with Bankruptcy Experts Dubbo on 1300 795 575, or visit our website: www.bankruptcyexpertsDubbo.com.au.