Bankruptcy Darwin, Just what is the Deal with Debts?

What Debts are cleared away if I go Bankrupt?

The basic answer is that when it concerns Bankruptcy most debts are wiped, and I have also included 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) as well as any debts arising from uninsured Motor-vehicle claims and educational debts which include HECS or FEE-HELP. These debts are not wiped out 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 absolute security attached 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 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 could 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 important to get professional advice - like that offered at Bankruptcy Experts Darwin.

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

Yes they can, both business and personal debts owing to the ATO can be removed with bankruptcy. If you have a business with any form of debts receive some advice because it is not always so easy. Feel free to call us right here over at Bankruptcy Experts Darwin if you have any questions on 1300 795 575. Or feel free to go to our website: www.bankruptcyexpertsDarwin.com.au

What about my business or Company debts?

In some cases when it involves Bankruptcy we can really help 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 this 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 Experts Darwin we specialise in business and personal debts so call us here at Bankruptcy Experts Darwin if you have any questions about Bankruptcy on 1300 795 575. Or feel free to explore our website: www.bankruptcyexpertsDarwin.com.au

Bankruptcy, Will I lose my Superannuation?

Bankruptcy in Australia can be convoluted and confusing. A question we normally get asked here at Bankruptcy Experts Darwin is 'what happens to my super if I file for Bankruptcy'? The reply for most is easy, if your super is usually in a regulated fund or industry fund like Sunsuper or Host Plus then virtually nothing happens; your super is 100 % safe when it comes down to 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") lately; 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 involves Bankruptcy?

Remember Bankruptcy Experts Darwin is not suggesting this post is the whole story, if you have any questions feel free to get in touch with us on 1300 795 575. No matter if you call us or another person it doesn't matter, just please don't walk into bankruptcy blind when it comes to your SMSF in truth we highly recommend you get 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 taking into account Bankruptcy, you can not be a part of a SMSF. Why? Because if you are dealing with bankruptcy, you will be classified as a 'disqualified person'. And a disqualified person cannot operate as an Individual Trustee. This poses a problem because usually most of the SMSFs are just 2 people, which means each of these members must also be the individual trustees. The duty of trustee causes a lot of legal rules, and if you are in this role I would highly recommend you to become knowledgeable about 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 destructive to a SMSF and as you can assume the process of Bankruptcy for a SMSF is rather convoluted.

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

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

For starters, the SMSF will have to be restructured. This means that you will want to consider your complete structure and make certain it is meeting the basic conditions, involving having a new trustee that is not having issues with Bankruptcy. The Australian Tax office will give 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 indicates you ought to let them know that you have a bankruptcy complication 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 need to also notify ASIC of their resignation.

During the course of 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 Experts Darwin for some free advice on 1300 795 575.

What if I have a single member fund?

If you are a single member fund, then you will have 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 clear away the property and halve the proceeds. They would then need to decide if they want 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 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 if one single member is running into issues, it can affect the very existence of an SMSF. If you are already facing this problem 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 recommended earlier, a basic 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 finding proper advice is the best initial step. If you want to discuss your possibilities further, contact us at Bankruptcy Experts Darwin or visit our website: www.bankruptcyexpertsDarwin.com.au or just call us on 1300 795 575.

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

Bankruptcy Darwin is a complicated process, but I know from meeting with thousands facing the possibility of bankruptcy over the years, that virtually nothing concerns people more than the thought of losing the family home or apartment. Almost everybody is sentimentally connected to their home - it's where the children have grown, it's where you appreciate life on a day to day basis.

Will you lose your house if you go bankrupt? The reply is a resounding maybe. (not very useful, I know) People typically feel that it's an inevitable consequence and a part of Bankruptcy, and because of this 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 advantage 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 Darwin 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 clearer image.

The responsibility of the bankruptcy trustee is to firstly comply with the regulation of the bankruptcy act 1966 (it's a very dull read about 600 pages if you are wondering).

Within that regulatory framework, the trustee is to help recover monies owed to your creditors, that is accomplished 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 off any assets that can contribute to fixing your debts.

What this sounds like is that yes the trustee will sell your house right? Not necessarily. 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 in your home 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 necessarily reflect the price today.

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

You might wonder, why would the bank want bankrupt customers? wouldn't they choose to sell your house and not take the risk? The bank that has generously lent you the money for your house is creating good money every month in interest out of you, month in month out, so long as you keep up to date with your payments then the bank desires you in there at all costs. Essentially however it's not the bank's call if the trustee determines 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 document the value of your house and the amount of money 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 recommendations or a real estate agents advice to arrive at this figure. When you get a valuer out to your home, ensure you tell the valuer to value the property for a quick sale, see to it 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 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 technique is critical to you: one you may 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 home may be worth a lot more than you thought. Get some tips before doing this. The amount 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 primary consideration is ownership, often houses are purchased 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 does not, the equity is only factored on the 50 % of the property.

When it comes down to Bankruptcy, this is just one of potentially numerous 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 house in bankruptcy also. I need to repeat this but get some guidance on this area of Bankruptcy because it is very tricky and every single case is different.

If you wish to learn more about what to do, where to turn and what questions to ask about Bankruptcy, then feel free to talk to Bankruptcy Experts Darwin on 1300 795 575, or visit our website: www.bankruptcyexpertsDarwin.com.au.

Bankruptcy in Darwin - Who exactly do I speak to?

Should I talk with my accountant about Bankruptcy?

The answer seems obvious doesn't it: if anyone knows your financial circumstance well in Darwin, 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 in mind when it comes to Bankruptcy, it's that his experience lie in helping you save you money at tax time, minimising your tax liability and lodging your BAS.

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

Should I talk to my Solicitor about Bankruptcy?

No! You can talk with your solicitor in Darwin but more than likely it won't do you much good. Solicitors are certainly good at carrying out things lawyers do, like assisting you do your Will and buying your house and keeping you out of court if you're lucky. When it comes to Bankruptcy, the specialists in Darwin tend to have either a legal or accounting qualifications, and the 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 small number of insolvency accounting firms, there are very few insolvency legal practices in Australia, and yes if you find one you will pay a substantial price for their expertise.

Should I speak to a financial counsellor about Bankruptcy?

Yes! There are plenty of financial counselling services to help you through this, they have no hidden agendas and they're a splendid option for letting you analyze your situation when it comes to Bankruptcy. If you are stressing out constantly, not sleeping, not eating or over-eating and thinking about money pressures continuously, then get some help.

There are also charities around Darwin like Lifeline that offer a terrific service. They will be a sounding board if you just need somebody to talk about with you what your choices are. Don't let your financial issue destroy your life - in the end it's just money.

If you want to learn more about what to do, where to turn and what points to ask about Bankruptcy, then feel free to speak to Bankruptcy Experts Darwin on 1300 795 575, or visit our website: www.bankruptcyexpertsDarwin.com.au.

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

When people in Darwin come to me looking to speak about Bankruptcy, they are constantly full of questions. The internet has lots of information, but far too much of it is baffling or contradicts itself, so I make it my mission to try and make it more clear. One of the most standard worries is 'Will I lose my business if I declare bankruptcy?' The brief answer is no. If you are a manager of a company any shape or size you can maintain your business if you want to. In Darwin, businesses that end up being insolvent have a few options such as liquidation, voluntary administration and so on. It's people who go bankrupt not businesses.

Bankruptcy is a complex area so get some reliable advice on this one if you have a business. Generally speaking, the financial debts in a business and personal debts go hand in hand when a business owner goes bankrupt. There are a few important implications for directors of companies when it pertains to Bankruptcy in Darwin: A bankrupt can not be a director of a company, so if you have a pty ltd company you definitely will need to resign as a director after you're bankrupt.

A constraint that applies when you are actually bankrupt as a business owner is that you may be in your very own business as a sole trader only. Certainly there are things you should disclose as an aspect of that but in a nutshell you can still run your company. For some business owners, bankruptcy affects their ability to run the business because of the licensing issues. As an example, 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 ideal questions when it concerns licenses and Bankruptcy in Darwin.

But if your business is not impacted directly by such issues, then you'll have 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 then open the doors the next day like not a single thing had happened. There are laws in place to prevent what is called phoenix companies popping up out of the ashes of an old company.

Having said that, it's just a point of talking to the correct people about Bankruptcy. Here in this situation you may think you need a liquidator for your company, and you could be right, but remember that every liquidator is different and have their own motives. Liquidators make money from your liquidation - heaps of money - so exactly what advice do you think you will get?

When it comes to Bankruptcy, I consider that giving generic advice in this area is possibly dangerous as it can have very serious implications for directors and business owners. This is because it is one of those cases where what the right advice for one business owner is the inappropriate advice for the other. There are some fundamentals however, that you may benefit from. There is no reduce to the size of the business you run even though you are bankrupt. You can employ staff. You can constantly deal with your vendors 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 would like to learn more about what to do, exactly where to turn and what questions to ask about Bankruptcy, then feel free to get in touch with Bankruptcy Experts Darwin on 1300 795 575, or visit our website: .bankruptcyexpertsDarwin.com.au.

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

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

Involuntary bankruptcy happens when someone you owe money to applies to the court to declare you bankrupt. Commonly when you get one of those notices, you have 21 days to pay all the debt. If you do not, then the creditor returns to the court and requests the court to issue a sequestration order that declares you bankrupt. A trustee is assigned, and then you have 14 days to get the documentation in and after that you are bankrupt.

You can contest a bankruptcy notice by going to court 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 reality no distinction between Involuntary Bankruptcy and or Voluntary Bankruptcy - once you are simply declared bankrupt, they're managed to in the same way.

However, when it comes to Bankruptcy for this, the stress, torment and fear that accompanies this method is incredible. If you think you are in all likelihood to be made bankrupt by someone, get some assistance and act on that advice. Generally I've found it's always far better to know what you can and can't do before you have a person bankrupt you. Once you are bankrupt, it's usually too late.

Voluntary Bankruptcy

Nevertheless, 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 just 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 assist 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 rate 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 remain on your file for 5 years, so for $30 you can have your credit file seriously damaged for that period of time - and all of this will impact how you have to approach Bankruptcy.

In many ways, the ease with which companies/credit providers can default your credit file is unscrupulous. The punishment doesn't seem to match 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 rubbed out completely.

So if your credit rating is a big element 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 difference is that with a DA or PIA you repay the money and nevertheless have it on your file for 7 years.

Bankruptcy

I have mentioned the word a few times now, but when it comes down to it, Bankruptcy is the biggest part, and the element most 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 specific country the arrangements 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 extremely reasonable.

I don't pretend to know why that is but a few hundred years ago debtors went to prison. These days I suppose the government feels 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 all 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 far more that can be said about doing 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, always remember that there are always alternatives when it concerns Bankruptcy in Darwin, so do some study, and Good luck!

If you want to learn more about what to do, where to turn and what questions to ask about Bankruptcy, then don't hesitate to speak with Bankruptcy Experts Darwin on 1300 795 575, or visit our website:bankruptcyexpertsDarwin.com.au.

Bankruptcy in Darwin - Will my income be altered if I go bankrupt?

Bankruptcy Darwin is a intricate process, and you have to be sure you get the right insight. 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 point out that your income is a considerable consideration when working through when it comes to Bankruptcy.

The very first thing you need to learn about this area of Bankruptcy is just how much you can earn before you start paying back money to your creditors via your trustee (see table below).

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

You can request a hardship variation that raises the threshold amount, if you have costs in Darwin such as medical, child care, substantial travel to and from your job, or a scenario where your partner used to work but is not able to support the household income.

Some of the interesting parts of Bankruptcy is that your employer will not be notified 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 thought about, for example if you provide $5,000 child support each year and you have no dependents living with you then your revised net income limit will be $55,332.10.

There are much more issues surrounding income and what is or isn't thought of as income - if you're uncertain, it's a good idea to get professional advice. The reason you need to consider your income as a part of the Big 5 questions here is that bankruptcy is in some instances not an economically sensible option.

If one of your creditors is the ATO (for unpaid taxes), then your tax refund will likely be taken by the ATO while you are bankrupt to add toward your tax bill. If you don't have a tax bill then you will keep your tax refund provided that doesn't take you over your threshold income restrictions.

If you believe that when it comes to Bankruptcy, your situation is more challenging, then please get specialist advice in Darwin. I may sound like a broken record, but bear in mind that it's always a smart idea to work through these options prior to declaring bankruptcy, due to the fact that once you have filed the paperwork it's too late to change your mind.

If you intend to learn more about what to do, where to turn and what questions to ask about Bankruptcy, then feel free to contact Bankruptcy Experts Darwin on 1300 795 575, or check out our website: bankruptcyexpertsDarwin.com.au.