Bankruptcy Alice Springs, So what is the Deal with Debts?

 

So what Debts are cleared away if I go Bankrupt?

The simple answer is that when it involves Bankruptcy most debts are wiped, and I have added 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) alongside any debts arising from uninsured Motor-vehicle claims and educational debts like HECS or FEE-HELP. These debts are not cleared away 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 genuine 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 cleared away if I file for bankruptcy?

Yes. If you have a car loan for $40,000 you can have that debt wiped out 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 has to be sold or returned. This is just one part that, when it comes to Bankruptcy, it is important to get professional advice - like that offered at Bankruptcy Experts Alice Springs.

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 eliminated with bankruptcy. If you have a business with any form of debts find some advice because it is not always so simple. Feel free to call us here over at Bankruptcy Experts Alice Springs if you have any questions on 1300 795 575. Or feel free to explore our website: www.bankruptcyexpertsAliceSprings.com.au

What about my business or Company debts?

Sometimes when it involves Bankruptcy we can assist you with your business debts, call us about this first. Remember bankruptcy applies to an individual not companies, trusts or businesses. Usually you may need to liquidate a company to deal with the debt that way. And 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 Alice Springs we specialise in business and personal debts so contact us here at Bankruptcy Experts Alice Springs if you have any questions about Bankruptcy on 1300 795 575. Or feel free to explore our website: www.bankruptcyexpertsAliceSprings.com.au

Bankruptcy, Will I lose my Superannuation?

Bankruptcy in Australia can be complicated and difficult to understand. A question we commonly get asked here at Bankruptcy Experts Alice Springs is 'what happens to my super if I apply for Bankruptcy'? The answer 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, take into account the growing number of members of Self-Managed Super Funds ("SMSFs") lately; 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 to Bankruptcy?

Remember Bankruptcy Experts Alice Springs is not suggesting this article is the complete story, if you have any questions feel free to call us on 1300 795 575. Whether you call us or someone else it doesn't matter, just please don't walk into bankruptcy blind when it comes to your SMSF indeed we highly recommend you obtain both legal and financial advice before proceeding with any of the actions indicated 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 being confronted by bankruptcy, you will be classified as a 'disqualified person'. And a disqualified individual cannot operate as an Individual Trustee. This poses a problem due to the fact that usually most of the SMSFs are just 2 people, which means both of these members have to also be the individual trustees. The position of trustee causes a lot of legal rules, and if you are in this position I would highly urge you to become aware of them all-- for example 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 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 to restructure my SMSF Fund after I'm bankrupt?

So what happens 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 over-all 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 provide you a 6 month 'grace period' to get this done before you face penalties. And keep in mind, sometimes the best 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 suggests you 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 need to inform the ATO using the form NAT 3036 (Found on the ATO website) and they must 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 uncertain call Bankruptcy Experts Alice Springs 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 need to appoint a new director, and it will then become 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 choose to remain as a single member SMSF, or if they need to roll it all into a managed fund. If both members are entering bankruptcy, then they would definitely need to sell all assets as soon as possible and transfer the liquid assets to the managed fund.

From this you can notice how when it comes to Bankruptcy, even though one single member is dealing with 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 sure you are satisfying the ATO requirements.

A simple solution ...

As I suggested earlier, a basic solution to your SMSF issue 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 receiving proper advice is the best initial step. If you want to discuss your possibilities further, contact us at Bankruptcy Experts Alice Springs or visit our website: www.bankruptcyexpertsAliceSprings.com.au or just give us a call on 1300 795 575.

Bankruptcy in Alice Springs - Will I lose my home if I go bankrupt?

Bankruptcy Alice Springs is a confusing process, but I know from meeting with thousands facing the likelihood of bankruptcy over the years, that almost nothing concerns people more than the thought of losing the family home or apartment. Almost every person is psychologically connected to their home - it's where the kids have grown up, it's where you appreciate life on a day to day base.

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

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

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

What this resembles is that yes the trustee will sell your house right? Not always. 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 on your property then it's pointless to sell your home. This is happening increasingly since the GFC as house prices in many locations have been heading south so what you paid 4 years ago may not automatically reflect the price today.

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

You might wonder, why would the bank want bankrupt clients? wouldn't they want 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, provided 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 figures out that there is plenty 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 jot down the value of your house and the portion 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 give you peace of mind, don't use your neighbours' gut feel tips or a real estate agents advice to arrive at this figure. When you get a valuer out to your property, make sure 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. These days 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 sway the result. The idea is that you want a practical sell now figure.

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

When it concerns Bankruptcy and houses, another major consideration is ownership, in many cases houses are acquired in joint names. In other words 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 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 part of the property 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 want 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 Experts Alice Springs on 1300 795 575, or visit our website: www.bankruptcyexpertsAliceSprings.com.au.

Bankruptcy in Alice Springs - Who do I talk to?

Should I talk to my accountant about Bankruptcy?

The answer seems obvious doesn't it: if anybody knows your financial situation well in Alice Springs, It's going to be your accountant. However, the short answer is a resounding No! It's not that your accountant doesn't 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, minimising your tax liability and lodging your BAS.

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

Should I chat with my Solicitor about Bankruptcy?

No! You can speak to your solicitor in Alice Springs but more than likely it won't do you much good. Solicitors are really good at undertaking 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 Alice Springs often tend to have either a legal or accounting qualifications, 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 like there are a handful of insolvency accounting firms, there are very few insolvency legal practices in Australia, and yes if you find one you will pay an ample price for their expertise.

Should I speak with a financial counsellor about Bankruptcy?

Yes! There are plenty of financial counselling services to assist you with this, they have no hidden agendas and they're a terrific option for really helping you think through your circumstance when it comes to Bankruptcy. If you find yourself stressing out constantly, not sleeping, not eating or over-eating and thinking of money pressures at all times, then get some help.

There are also charitable organizations around Alice Springs like Lifeline that offer a remarkable service. They will be a sounding board if you just need somebody to go over with you what your choices are. Don't let your financial trouble destroy your life - ultimately it's just money.

If you need to learn more about what to do, where to turn and what problems to ask about Bankruptcy, then feel free to call Bankruptcy Experts Alice Springs on 1300 795 575, or visit our website: www.bankruptcyexpertsAliceSprings.com.au.

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

When people in Alice Springs come to me trying to speak about Bankruptcy, they are usually filled with questions. The internet has plenty of information, but far too much of it is baffling or contradicts itself, so I make it my mission to try and make things more clear. One of the most natural worries is 'Will I lose my business if I declare bankruptcy?' The quick answer is no. If you are an owner of a business any shape or size you can keep your business if you would like to. In Alice Springs, businesses that eventually become insolvent have a few options such as liquidation, voluntary administration and so on. It's individuals who go bankrupt not companies.

Bankruptcy is a complex area so get some reliable advice on this 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 essential implications for directors of companies when it pertains to Bankruptcy in Alice Springs: A bankrupt can not be a director of a company, so if you have a pty ltd company you are going to need to resign as a director as soon as you're bankrupt.

A restriction that applies when you are generally bankrupt as a business owner is that you may be in your very own business as a sole trader only. There are things you should reveal as an aspect of that but generally you can still run your company. For some business owners, bankruptcy affects their ability to run the business because of the licensing issues. Such as, if you run a building company, your license will be suspended once you're bankrupt and as a consequence you can no longer trade without that license, so make sure you are asking the ideal questions when it concerns licenses and Bankruptcy in Alice Springs.

Having said that if your business is not impacted directly by such issues, then you'll will 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 afterwards open the doors the next day like almost nothing had happened. There are laws in place to avoid what is called phoenix companies popping up out of the ashes of an old business.

Having said that, it's just an issue of speaking to the best people about Bankruptcy. Here in this circumstance you may believe you need a liquidator for your business, and you might be right, but bear in mind that every liquidator is unique and have their own motives. Liquidators earn money from your liquidation - heaps of money - so what advice do you think you will get?

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

So when it concerns Bankruptcy, don't get extremely uneasy about what you can and can't do as a business owner, just get the right advice ... If you want to learn more about what to do, precisely where to turn and what questions to ask about Bankruptcy, then feel free to call Bankruptcy Experts Alice Springs on 1300 795 575, or visit our website:.bankruptcyexpertsAlice Springs.com.au.

Bankruptcy in Alice Springs - Changes that help Small Business and Entrepreneurs

Do you have an idea of just how much Bankruptcy AliceSprings is changing? The Australian Government at the end of 2015 set forth some progressive changes to the Bankruptcy Laws in Australia. One of the most significant of these is the length of time that a person is bankrupt for. At this time, there is a minimum amount of time that you must remain bankrupt, having said that, this 3 year period may very well be reduced to just 12 months. So if you are inquiring about Bankruptcy, this news may be quite important to you.

Mark Carnegie in the Financial Review on the 7th December 2015 suggested that "the proposed changes to ease the burden of bankruptcy laws didn't go far enough and the government should adopt US-style laws to protect the family home".

These changes to the issue of Bankruptcy will take 18 months to implement. Mr Carnegie, went on to say in the Financial Review that shielding family assets was very important because "banks just terrorise small business and the mental health consequences to society are enormous".

The problem is Australia's bankruptcy laws prevented investors from supporting start-ups, and therefore mentoring had been "driven out of the system".

"They naturally find it very intimidating themselves personally and with their assets at risk in a risky early-stage deal, but with their own money in the deal and a lightened-up provision I think we 'd probably see more willingness. It could be more important than the money."

Fraudulent Behavior

The controversy about this Bankruptcy issue in Alice Springs that some come up with is that this shift will only push fraudulent behavior opening pandora's box in a manner of speaking for the unscrupulous to misuse of the bankruptcy system. We have looked at the minimum, but on the other side of the issue, The government is not proposing to change the maximum term of 8 years if it deems a bankrupt has performed in an unethical or fraudulent way, and there are no proposals to change the outcomes of misrepresenting yourself or financial position when filing for bankruptcy in Australia.

As a bankruptcy professional in Alice Springs, I have a fair share of knowledge when it comes to Bankruptcy. And having dealt with thousands of bankruptcy cases in Alice Springs I have never come across someone abusing the system or acting in an immoral way as to exploit the insolvency laws in Australia. When it comes to Bankruptcy, every week I help a small business owner or entrepreneur suffer through the very formidable task of bankruptcy, not once have I thought they are happy about it. The normal small business owner or entrepreneur in Alice Springs does not start out taking enormous financial risks with the intention to fail. The media loves citing the apparent misuse that will be rampant if these changes occur, what a joke!

A Win for Small Business

These recommended changes will be good for often the best and brightest in Alice Springs not get tossed out of the game financially for financial decisions often outside of their control. Most small business owners I help with Bankruptcy, are hardworking, tax paying, companies keeping this country going.

There really is a fine line with exactly what the government is trying to do here, because they are aiming to balance helping people who have made decisions out of their control, and preventing people from making errors that land them in trouble and as a result an issue of Bankruptcy. However you also don't want to get rid of the experience and knowledge that business owners have. You absolutely don't want to smash people simply because they have had an honest failure in a large or small start-up enterprise that has not panned out.

At the big end of town large well-known companies have long been criticised for their failure to innovate - lets face it they would be more likely to do so if the risks of bankruptcy were lowered because directors are worried they'll be personally responsible in an insolvency arrangement if the new venture doesn't work out.

The government's suggested 'safe haven' modifications for directors of companies will allow Australia to more fully explore and innovate, which will make big updates for Bankruptcy. I cannot imagine, that these revisions will be detrimental to Australia's economy, indeed these bankruptcy laws will save the tax payer in all areas of health - Especially in the mental health sector because the emotional cost of bankruptcy is extensive. When it comes to Bankruptcy in Alice Springs not a day goes by where I don't find out the tragic stories of relationship failures, thoughts of suicide and the list goes on.

Bankruptcy helps save lives, and it could save yours. If you need some assistance with your debts in Alice Springs or are just thinking about Bankruptcy, don't hesitate to phone us here at Bankruptcy Experts Alice Springs on 1300 795 575, or visit our website: bankruptcyexpertsalicesprings.com.au

Bankruptcy in Alice Springs - does it matter if it is voluntary?

When it comes to Bankruptcy in Alice Springs, usually people aren't aware that there can be both voluntary, and involuntary bankruptcy - both have unique methods and policies.

Involuntary bankruptcy takes place when a person you owe money to involves the court to declare you bankrupt. Usually when you get one of these notices, you have normally 21 days to pay all the debt. If you don't, then the creditor goes back to the court and asks the court to issue a sequestration order that declares you bankrupt. A trustee is appointed, and then you have 14 days to get the documents in and then you are bankrupt

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

However, when it concerns Bankruptcy for this, the stress, torment and fear that accompanies this method is incredible. If you think you are probable to be made bankrupt by someone, get some advice 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 somebody bankrupt you. Once you are bankrupt, it's usually far too late.

Voluntary Bankruptcy

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

.

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

Once, I had an 80 year old pensioner, who came 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 phone 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 impact how you need to approach Bankruptcy.

In many ways, the ease with which companies/credit providers can default your credit file is unfair. 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, remember that bankruptcy is on your credit file for a total 7 years then its erased completely.

So if your credit rating is a big aspect in trying to decide whether to enter into 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 stated the word a few times now, but when it comes down to it, Bankruptcy is the biggest part, and the element more people are afraid of when they come to me to go over 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 over with no strings attached. As compared to countries like the United States, our bankruptcy laws are very good.

I don't claim to know why that is but a couple of hundred years ago debtors went to prison. Nowadays I suppose the government finds that 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 in turn 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 take care of a car accident if the car was not actually insured.

There is a lot 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 possible options. When getting some advice, keep in mind that there are always possibilities when it involves Bankruptcy in Alice Springs, so do some legwork, and Good luck!

If you want to learn more about just what to do, where to turn and what questions to ask about Bankruptcy, then feel free to reach out to Bankruptcy Experts Alice Springs on 1300 795 575, or visit our website: bankruptcyexpertsAlice Springs.com.au.