Monday, August 7, 2017

Bankruptcy Hobart, What is the Deal with Debts?


Which Debts are wiped out if I go Bankrupt?

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

But, simply put some of the exceptions are Centrelink Debts, Child Support, Court fines (like speeding fines) along with 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 car loan or a home loan; it is a debt that has some real security connected to it. So for instance 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 removed if I file for bankruptcy?
Yes. If you have a car loan for $40,000 you can have that debt eliminated 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 may be wiped but the asset will need to be sold or returned. This is just one component that, when it comes to Bankruptcy, it is essential to get professional assistance - like that readily available at Bankruptcy Advice Hobart.

What about my Tax Debts with the ATO can they be cleared away If I go bankrupt?
Yes they can, both business and personal debts owing to the ATO can be cleared away with bankruptcy. If you have a business with any kind of debts receive some advice because it is not always so simple. Feel free to call us here over at Bankruptcy Advice Hobart if you have any type of questions on 1300 879 867. Or feel free to visit our website: www.bankruptcy-advice.com.au/Hobart.com.au

What about my business or Company debts?

In some cases when it involves 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. Typically you may have to liquidate a company to deal with the debt that way. And when it comes to Bankruptcy, it can be a confusing area, so remember there are implications for a business owner such as insolvent trading. At Bankruptcy Advice Hobart we specialise in business and personal debts so contact us here at Bankruptcy Advice Hobart if you have any questions regarding Bankruptcy on 1300 879 867. Or feel free to go to our website: www.bankruptcy-advice.com.au/Hobart.com.au

Monday, May 22, 2017

Bankruptcy, Will I lose my Superannuation?



Bankruptcy in Australia can be involved and perplexing. A question we usually get asked here at Bankruptcy Advice Hobart is 'what happens to my super if I apply for Bankruptcy'? The answer for most is straightforward, if your super is normally in a regulated fund or industry fund like Sunsuper or Host Plus then absolutely nothing happens; your super is 100 % safe when it comes to Bankruptcy.



What if I have a Self Managed Super Fund?

This is a growing concern, consider the evolving number of members of Self-Managed Super Funds ("SMSFs") in recent years; the ATO tells us it has grown 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 Hobart is not suggesting this article is the whole story, if you have any questions feel free to call us on 13a00 879 867. Whether or not you call us or somebody else it doesn't matter, just please don't walk into bankruptcy blind when it comes to your SMSF in fact we advise you get 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 considering Bankruptcy, you can not be a part of a SMSF. Why? Because if you are coping with bankruptcy, you will be grouped as a 'disqualified person'. And a disqualified individual 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 have to also be the individual trustees. The role of trustee presents a lot of legal rules, and if you are in this position I would highly encourage you to end up being aware of them all-- including the fact that you can not 'know or suspect' that one of you are bankrupt. So you can notice how an individual bankruptcy can be very harmful to a SMSF and as you can assume the process of Bankruptcy for a SMSF is rather convoluted.

How long do I have to restructure my SMSF Fund after I'm bankrupt?

So what takes place if one of the members of an SMSF does enter Bankruptcy?
For starters, the SMSF will have to be reorganized. This means that you will need to consider your overall structure and make sure it is meeting the basic conditions, including having a new trustee that is not dealing with issues with Bankruptcy. The Australian Tax office will offer 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 frequently keeping the ATO informed of what is happening. This indicates you will need to let them know that you have a bankruptcy problem 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 must 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 Hobart 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 be 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 remove the property and halve the proceeds. They would then need to decide if they choose to remain as a single member SMSF, or if they intend to roll all of it into a managed fund. If both members are entering bankruptcy, then they would need to sell all assets right away and move the liquid assets to the managed fund.

From this you can notice how when it comes to Bankruptcy, even when one single member is dealing with issues, it can affect the very existence of an SMSF. If you are at this point facing this problem 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 headaches outlined above. Bankruptcy is never easy, but receiving proper advice is the best initial step. If you want to discuss your possibilities further, give us a call at Bankruptcy Advice Hobart or visit our website: www.bankruptcy-advice.com.au/Hobart.com.au or just call us on 1300 879 867.

Wednesday, January 18, 2017

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


Bankruptcy Hobart is a complicated process, but I know from meeting with thousands facing the prospect of bankruptcy over the years, that absolutely nothing concerns people more than the notion of losing the family house. Almost every person is on an emotional level connected to their home - it's where the kids have grown up, it's where you appreciate life on a day to day basis.


Will you lose your house if you go bankrupt? The answer is a resounding maybe. (not very helpful, I know) People generally believe it's an inevitable consequence and a part of Bankruptcy, and consequently 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 Hobart house, you ask? It's easier if I explain the basic principle behind the Bankruptcy process as administered by the trustee, then you'll have a more clear idea.

The responsibility of the bankruptcy trustee is to firstly abide by the regulation of the bankruptcy act 1966 (it's a very boring read about 600 pages if you are serious).
Within that regulatory framework, the trustee is to help recover monies owed to your creditors, that is executed in a bunch of distinct 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 fixing 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 any asset including your house is to get money to pay back 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 areas have been heading south so what you paid 4 years ago may not always reflect the price today.
A quick tip here if you have a house in Hobart and are looking at Bankruptcy: get a specialist to help you through this process, there are a lot of variables in these scenarios that need to be considered.

You might wonder, why would the bank want bankrupt clients? wouldn't they choose to sell your house and not take the risk? The bank that has kindly lent you the money for your house is making good money every month in interest out of you, month in month out, provided that you keep up to date with your monthly payments then the bank really wants you in there at all costs. Essentially however it's not the bank's call if the trustee figures out 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 mark 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 provide you peace of mind, don't use your neighbours' gut feel tips or a real estate agents advice to reach this figure. When you get a valuer out to your home, ensure that 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 provide 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 let them know you need to sell the house in the next 30 days you may sway the result. The idea is that you want a sound sell now figure.

There are two main reasons this valuation process is critical to you: one you will definitely have peace of mind ascertaining the market value of your house, and then you can easily establish your equity position. Secondly, your property may be really worth far more than you thought. Get some tips before doing this. The number of times I've seen clients that have sold their family home of 20 years just to discover I could of helped them keep it; unfortunately this happens all too often

When it concerns Bankruptcy and houses, another notable consideration is ownership, often houses are purchased 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 does not, the equity is only factored on the 50 % of the property.

When it comes down to Bankruptcy, this is just one of possibly hundreds of scenarios that are likely when it comes down to the family home. Bear in mind the non-bankrupt party can buy the bankrupt's portion of the house in bankruptcy also. I have to repeat this but get some advice on this area of Bankruptcy because it is very tricky 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 get in touch with Bankruptcy Advice Hobart on 1300 879 867, or visit our website: www.bankruptcy-advice.com.au/Hobart.

Wednesday, November 16, 2016

Bankruptcy in Hobart - Who do I talk to?



Should I speak with my accountant about Bankruptcy?
The answer seems clear doesn't it: if anybody knows your financial situation well in Hobart, It's going to be your accountant. However, the short answer is a resounding No! It's not that your accountant does not have your best interests at heart when it comes to Bankruptcy, it's that his specialization lie in helping you save you money at tax time, reducing your tax liability and lodging your BAS.

Most accounting degrees will spend hardly any to no time on bankruptcy, it's generally done as a post graduate speciality program for those who intend to work in the field. Unless your accountant is an insolvency specialist, he won't know that a lot about the effects of Bankruptcy, I can assure you insolvency specialists know much about tax returns or BAS in. If you do happen to find an insolvency accounting firm in Hobart, they often tend to be large firms with very nice office spaces who charge accordingly.

Should I consult with my Solicitor about Bankruptcy?
No! You can talk to your solicitor in Hobart but more than likely it won't do you much good. Solicitors are definitely good at doing things lawyers do, like helping you do your Will and buying your house and trying to keep you out of court if you're lucky. When it comes to Bankruptcy, the specialists in Hobart often tend to have either a legal or accounting background, and the main reason for that is simply that you can't enrol in the post graduate study to become a qualified insolvency practitioner unless you have a law or accounting degree.

Just as there are a small number of insolvency accounting firms, there are very few insolvency legal practices in Australia, and yes if you locate one you will pay a sizeable price for their expertise.

Should I talk to a financial counsellor about Bankruptcy?
Yes! There are lots of financial counselling services to aid you through this, they have no hidden agendas and they're a delightful option for letting you analyze your circumstance when it comes to Bankruptcy. If you find yourself freaking out constantly, not sleeping, not eating or over-eating and thinking about money pressures at all times, then get some help.
There are also charities around Hobart like Lifeline that offer a wonderful service. They will be a sounding board if you just need someone to review with you what your choices are. Don't let your financial issue destroy your life - in the end it's just money.


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

Monday, August 8, 2016

Bankruptcy in Hobart - Will I lose my business if I go bankrupt?



When people in Hobart come to me planning to discuss Bankruptcy, they are typically packed with questions. The internet is full of information, but far too much of it is confusing or contradicts itself, so I make it my mission to try and make things clearer. One of the very most common concerns is 'Will I lose my business if I declare bankruptcy?' The quick answer is no. If you are an owner of a company any shape or size you can keep your business if you wish to. In Hobart, businesses that are insolvent have a few options for example, liquidation, voluntary administration and so on. It's individuals who go bankrupt not companies.

Bankruptcy is a complex area so get some expert advice on this one if you have a business. Generally speaking, the debts in a business and personal debts go hand in hand when a business owner goes bankrupt. There are some vital implications for directors of companies when it pertains to Bankruptcy in Hobart: A bankrupt can not be a director of a company, so if you have a pty ltd company you are going to need to retire as a director once you're bankrupt.

A restriction that applies when you are actually bankrupt as a business owner is that you can be in your own business as a sole trader only. Certainly there are things you will want to make known as a part of that but in essence you can still run your company. For some business owners, bankruptcy impacts their ability to run the business because of the licensing issues. For instance, if you run a building company, your license will be suspended once you're bankrupt and consequently you can not trade without that license, so make sure you are asking the appropriate questions when it involves licenses and Bankruptcy in Hobart.

Having said that if your business is not impacted directly by such issues, then you'll need to restructure the way you run your business. There are considerations when and if you go bankrupt as a business owner: you can not acquire heaps of debt in your business, then go bankrupt and then open the doors the next day like not a single thing had happened. There are laws in place to avoid what is called phoenix companies appearing out of the ashes of an old company.

Having said that, it's just an issue of consulting with the suitable people about Bankruptcy. In this circumstance you may think you need a liquidator for your business, and you could be right, but remember that every liquidator is distinct and have their own motives. Liquidators earn money from your liquidation - heaps of money - so just what advice do you think you will get?

When it comes to Bankruptcy, I consider that giving generic advice in this area is essentially harmful as it can have very significant implications for directors and business owners. This is because it is just one of those cases where what the right advice for one business owner is the wrong advice for the other. There are some principles however, that you may benefit from. There is no reduce to the size of the business you run while you are bankrupt. You can employ staff. You can continue to deal with your suppliers under certain conditions, the main one being you will need to meet the payment terms agreed upon.


So when it comes to Bankruptcy, don't get overly upset about what you can and can't do as a business owner, just get the appropriate advice ... 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 reach out to Bankruptcy Advice Hobart on 1300 879 867, or visit our website: bankruptcy-advice.com.au/Hobart .

Monday, July 4, 2016

Bankruptcy in Hobart - does it matter if it is voluntary?


When it comes to Bankruptcy Hobart, typically people aren't aware that there can be both voluntary, and involuntary bankruptcy - the two have unique approaches and guidelines.

Involuntary bankruptcy arises when somebody you owe money to involves the court to declare you bankrupt. Typically when you get one of those notices, you have 21 days to pay all the debt. If you do not, then the creditor goes back to the court and asks the court to provide a sequestration order that declares you bankrupt. A trustee is assigned, and then you have 14 days to get the documentation in and then you are bankrupt.

You can challenge a bankruptcy notice by going to court shortly after the 21 days have expired and put your case forward, to stop it going to the next level. Apart from the way you became bankrupt there is in fact no difference between Involuntary Bankruptcy and or Voluntary Bankruptcy - once you are simply declared bankrupt, they're conducted to in the same way.

However, when it comes to Bankruptcy for this, the stress, torment and fear that accompanies this process is incredible. If you think you are prone to be made bankrupt by someone, get some guidance and act on that advice. Generally I've found it's always more effective to know what you can and can't do before you have someone else bankrupt you. Once you are bankrupt, it's normally too late.

Voluntary Bankruptcy

Alternatively, when it comes to Bankruptcy, sometimes there are times that it is the best option. So you may want to ask yourself, 'when should I consider voluntary Bankruptcy?'.

This question is not the very same for every person of course, but more often than not I find that one way you could work it out is to figure out how long it will take you to pay each one of your debts - if its longer than 3 years (the period you are declared bankrupt), then this may really help you make that decision, and help you to understand Bankruptcy.

Once, I had an 80 year old pensioner, who spoke to me once regarding * Bankrupcty tell me that her credit card statement calculated how long her debt would take to pay at the level she was paying off her account, and it was 35 years! Imagine 35 years for one credit card bill.

Credit rating damage can help you think this through. If you move house and forget to pay your $30 phone bill for 6 months more, it's very likely the telephone company will default your credit file. That default will sit on your file for 5 years, so for $30 you can have your credit file truly damaged for that period of time - and all of this will affect how you have to approach Bankruptcy.

In many ways, the ease with which companies/credit providers can default your credit file is unreasonable. The punishment doesn't seem to equate to the crime in my book. So if you already have defaults on your credit report for 5 years, keep in mind that bankruptcy is on your credit file for a total 7 years then its rubbed out completely.

So if your credit rating is a big issue in trying to decide whether to participate in a Debt Agreement or Personal Insolvency Agreement or Bankruptcy remember they will all sit on your credit file for a total of 7 years. The biggest contrast is that with a DA or PIA you repay the money and still have it on your file for 7 years.

Bankruptcy

I have talked about the word a few times now, but when it comes down to it, Bankruptcy is the biggest part, and the part more people are afraid of when they come to me to discuss their financial situation and Bankruptcy. The other side of crime and punishment equation is bankruptcy, and in this country the provisions are very generous: you can go bankrupt owing millions of dollars and after 3 years it's all finished with no strings attached. Compared with countries like the United States, our bankruptcy laws are very generous.

I don't pretend to know why that is but a few hundred years ago debtors went to prison. Nowadays I suppose the government thinks the sooner it can get you back on your feet working and paying tax, the better. It makes more sense than locking you up which costs the taxpayer anyway.

Bankruptcy wipes every one of your debts including ATO debts with the exception of a few things:

·         Centrelink Debts, Court Fines like parking and speeding fines.
·         HECS or Fee Help loans.
·         Money to pay for a car accident if the car was not actually insured.

There is far more that can be said about this and Bankruptcy in general but the objective of this blog was to help you decide between a few available options. When getting some advice, bear in mind that there are always options when it involves Bankruptcy in Hobart, so do some investigation, and Good luck!


If you would like to learn more about what to do, where to turn and what questions to ask about Bankruptcy, then don't hesitate to contact Bankruptcy Advice Hobart on 1300 879 867, or visit our website:bankruptcy-advice.com.au/Hobart .

Monday, May 23, 2016

Bankruptcy in Hobart - Will my income be changed if I go bankrupt?


Bankruptcy Hobart is a intricate process, and you need to be sure you get the right guidance. And when it comes to your income being affected, the answer to the question is maybe. The very first thing you need to know about going bankrupt is there is no limit on how much you can earn. However, I will mention that your income is a significant consideration when working through when it comes to Bankruptcy.

The first thing you need to keep in mind about this area of Bankruptcy is how much you can earn efore you start paying back money to your creditors via your trustee (see table below).

Net income is the pre-tax/ in the hand portion you earn each year. A dependant is someone who lives with you and earns less than $3,124 per year (regardless of their age).

You can look for a hardship variation that raises the threshold amount, if you have expenses in Hobart such as medical, child care, significant travel to and from work, or a circumstance where your spouse used to work but is not able to contribute to the household income.

Some of the intriguing parts of Bankruptcy is that your employer will not be told when you file for bankruptcy. Also, Child support is always looked at in bankruptcy, if you receive child support that is not factored in as income. If you pay child support this will be also considered, for example if you give $5,000 child support each year and you have no dependents living with you then your changed net income limit will be $55,332.10.

There are more issues involving income and what is or isn't considered income - if you're not sure, it's ideal to get qualified advice. The reason you must consider your income as a part of the Big 5 questions here is that bankruptcy is in some instances not an economically viable option.

If one of your creditors is the ATO (for unpaid taxes), then your tax refund will be taken by the ATO whilst you are bankrupt to contribute toward your tax bill. If you don't have a tax bill then you will keep your tax refund just as long as that doesn't take you over your threshold income limitations.

If you feel like when it comes to Bankruptcy, your situation is more intricate, then simply get specialist advice in Hobart. I may seem like a broken record, but bear in mind that it's always a smart idea to overcome these options prior to declaring bankruptcy, since once you have filed the paperwork it's far too late to change your mind.


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 contact Bankruptcy Advice Hobart on 1300 879 867, or explore our website:bankruptcy-advice.com.au/Hobart .