Bankruptcy Gold Coast, Just what is the Deal with Debts?

So what Debts are removed if I go Bankrupt?

The uncomplicated answer is that when it involves Bankruptcy most debts are wiped, and I have added a table below for you to look at.

But, put simply some of the exceptions are Centrelink Debts, Child Support, Court fines (like speeding fines) as well as any debts arising from uninsured Motor-vehicle claims and educational debts for example, HECS or FEE-HELP. These debts are not removed 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 definite security attached to it. So for example if you buy a new car for $40,000 dollars the security for this 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 erased if you simply hand back 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 must be sold or returned. This is just one element that, when it comes to Bankruptcy, it is vital to get professional help - like that you can find at Bankruptcy Advice Gold Coast.

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 erased with bankruptcy. If you have a business with any type of debts get some advice because it is not always so simple. Feel free to call us right here over at Bankruptcy Advice Gold Coast if you have any type of questions on 1300 879 867. Or feel free to head to our website: www.bankruptcy-advice.com.au/GoldCoast.au

What about my business or Company debts?

In some cases when it concerns Bankruptcy we can aid you with your business debts, call us concerning this first. Remember bankruptcy applies to an individual not companies, trusts or businesses. Normally you may have to liquidate a company to deal with the debt that 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 Advice Gold Coast we specialise in business and personal debts so give us a call here at Bankruptcy Advice Gold Coast if you have any questions regarding Bankruptcy on 1300 879 867. Or feel free to head to our website: www.bankruptcy-advice.com.au/GoldCoast.au

Bankruptcy, Will I lose my Superannuation?

Bankruptcy Australia can be complicated and difficult to understand. A question we usually get asked here over at Bankruptcy Advice Gold Coast is 'what happens to my super if I declare Bankruptcy'? The answer for most is easy, if your super is probably in a regulated fund or industry fund like Sunsuper or Host Plus then nothing 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 of the increasing number of members of Self-Managed Super Funds ("SMSFs") in the last few years; the ATO tells us it has expanded Australia-wide from 758,589 in 2009 to 1,011,689 in 2014. So what happens to these Superfunds when it comes down to Bankruptcy?

Remember Bankruptcy Advice Gold Coast is not suggesting this post is the whole story, if you have any questions feel free to consult with us on 1300 879 867. Whether you call us or someone else it does not matter, just please don't walk into bankruptcy blind when it comes to your SMSF in fact we strongly recommend you obtain both legal and financial advice before proceeding with any of the actions suggested 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 confronting bankruptcy, you will be categorized as a 'disqualified person'. And a disqualified person cannot operate as an Individual Trustee. This poses a problem since usually most of the SMSFs are just 2 people, which means each of these members will need to also be the individual trustees. The position of trustee sets a lot of legal rules, and if you are in this position I would highly encourage you to end up being 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 quite detrimental to a SMSF and as you can assume the process of Bankruptcy for a SMSF is rather convoluted.

How much time do I have so as to restructure my SMSF Fund after I'm bankrupt?

So what comes about if one of the members of an SMSF does enter Bankruptcy?

For starters, the SMSF will need to be restructured. This means that you will have to consider your complete structure and make sure it is meeting the basic conditions, including things like having a new trustee that is not suffering from issues with Bankruptcy. The Australian Tax office will supply you a 6 month 'grace period' to get this done before you face penalties. And keep in mind, sometimes the most ideal plan would be to simply roll the fund into an industry or corporate fund.

Beyond these large scale restructuring 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 indicates 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.

Through that 6 month period you will need to remove the Bankrupt from the SMSF-- including their property and assets. Remember if you are not exactly sure call Bankruptcy Advice Gold Coast for some free advice on 1300 879 867.

What if I have a single member fund?

If you are a single member fund, then you will need to appoint a new director, and it will then become their obligation to oversee the sale and transfer of assets into a managed fund. If there are two or more members, than the bankrupt member will need to resign and the other member will clear away the property and halve the proceeds. They would then want to decide if they choose to remain as a single member SMSF, or if they want to roll everything into a managed fund. If both members are entering bankruptcy, then they will need to sell all assets at once and move the liquid assets to the managed fund.

From this 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 right now facing this matter 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 simple 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 problems outlined above. Bankruptcy is never easy, but getting proper advice is the best first step. If you want to discuss your possibilities further, give us a call at Bankruptcy Advice Gold Coast or visit our website: www.bankruptcy-advice.com.au/GoldCoast.au or just give us a call on 1300 879 867.

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

Bankruptcy Gold Coast is a complicated process, but I know from meeting with thousands facing the prospect of bankruptcy over the years, that almost nothing concerns people more than the idea of losing the family home. Almost everyone is on an emotional level connected to their home - it's where the children have grown up, it's where you take pleasure in life on a day to day basis.

Will you lose your house if you go bankrupt? The reply is a resounding maybe. (not very helpful, I know) People typically presume it's an inevitable consequence and a part of Bankruptcy, and hence 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 Gold Coast 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 clearer idea.

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

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

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

A quick tip here if you have a house in Gold Coast and are looking at Bankruptcy: get a professional to help you through this process, there are a number of variables in these scenarios that need to be considered.

You might wonder, why would the bank want bankrupt clients? wouldn't they prefer to sell your house and not take the risk? The bank that has nicely lent you the money for your house is earning good money every month in interest out of you, month in month out, as long as you keep up to date with your payments then the bank wants you in there at all costs. Essentially however it's not the bank's call if the trustee decides that there is loads of 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 quantity you owe on the house. A tip if you are trying to work out the value of your house: use a registered valuer as this will provide you peace of mind, don't use your neighbours' gut feel recommendations or a real estate agents advice to get to this figure. When you get a valuer out to your home, see to it you tell the valuer to value the property for a quick sale, make sure 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 sensitive sale. Nowadays that's not the case, but if you meet them and tell them you need to sell your home in the next 30 days you may control the result. The idea is that you want a reasonable sell now figure.

There are two main reasons this valuation system is critical to you: one you will certainly have peace of mind ascertaining the market value of your house, then afterwards you can easily build your equity position. The second thing is, your house may be really worth so much more than you thought. Get some suggestions before carrying this out. The amount of times I've met clients that have sold their family home of 20 years simply to discover I could of helped them keep it; unfortunately this happens all too often

When it comes to Bankruptcy and houses, another major consideration is ownership, in most cases houses are acquired in joint names. Simply put 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 to Bankruptcy, this is just one of possibly hundreds of scenarios that are possible when it comes down to the family home. Bear in mind the non-bankrupt party can buy the bankrupt's part of the home in bankruptcy also. I should repeat this but get some information on this area of Bankruptcy because it is very tricky and each and every case is different.

If you need to learn more about what to do, where to turn and what questions to ask about Bankruptcy, then feel free to speak with Bankruptcy Advice Gold Coast on 1300 879 867, or visit our website: www.bankruptcy-advice.com.au/GoldCoast.