Bankruptcy Geraldton, Just what is the Deal with Debts?

Precisely what Debts are eliminated if I go Bankrupt?

The easy answer is that when it comes to Bankruptcy most debts are wiped, and I have also included a compendium below for you to look at.

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

What about Secured Debts?

A secured debt is a vehicle loan or a home loan; it is a debt that has some real security affixed 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 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 aspect that, when it comes to Bankruptcy, it is essential to get professional assistance - like that readily available at Bankruptcy Experts Geraldton.

What about my Tax Debts with the ATO can they be erased 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 sort of debts receive some advice because it is not always so straightforward. Feel free to call us right here over at Bankruptcy Experts Geraldton if you have any questions on 1300 795 575. Or feel free to visit our website: www.bankruptcyexpertsGeraldton.com.au

What about my business or Company debts?

In some cases when it concerns 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 need 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 Experts Geraldton we specialise in business and personal debts so call us here at Bankruptcy Experts Geraldton if you have any questions regarding Bankruptcy on 1300 795 575. Or feel free to explore our website: www.bankruptcyexpertsGeraldton.com.au

Bankruptcy, Will I lose my Superannuation?

Bankruptcy in Australia can be complicated and difficult to understand. A question we often get asked here over at Bankruptcy Experts Geraldton is 'what happens to my super if I file for Bankruptcy'? The reply for most is straightforward, if your super is 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, take into consideration the evolving number of members of Self-Managed Super Funds ("SMSFs") over 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 concerns Bankruptcy?

Remember Bankruptcy Experts Geraldton is not implying this short article is the complete 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 does not matter, just please don't walk into bankruptcy blind when it comes to your SMSF in truth we encourage you seek 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 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 the two of these members will need to also be the individual trustees. The job of trustee presents 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 notice how an individual bankruptcy can be rather damaging to a SMSF and as you can imagine the process of Bankruptcy for a SMSF is rather convoluted.

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

So what comes about 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 entire structure and make certain it is meeting the basic conditions, including things like having a new trustee that is not experiencing issues with Bankruptcy. The Australian Tax office will offer you a 6 month 'grace period' to get this done before you face penalties. And consider, sometimes the most effective 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 means you ought to let them know that you have a bankruptcy issue 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.

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 sure call Bankruptcy Experts Geraldton 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 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 have to resign and the other member will take 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 intend to roll it all into a managed fund. If both members are entering bankruptcy, then they will need to sell all assets as soon as possible and transfer the liquid assets to the managed fund.

From that you can see 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 at this point facing this issue yourself, or with a partner in a SMSF, please seek financial advice to make sure you are meeting 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 before bankruptcy and save yourself all the frustrations outlined above. Bankruptcy is never easy, but receiving proper advice is the best initial step. If you want to discuss your options further, call us at Bankruptcy Experts Geraldton or visit our website: www.bankruptcyexpertsGeraldton.com.au or just call us on 1300 795 575.

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

Bankruptcy Geraldton is a confusing process, but I know from meeting with thousands facing the prospect of bankruptcy over the years, that practically nothing troubles people more than the notion of losing the family home or apartment. Almost every person is emotionally 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 home if you go bankrupt? The reply is a resounding maybe. (not very helpful, I know) People generally feel 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 benefit of Debt Agreements and Personal Insolvency Agreements is you can keep your house. The reason is simple: you've agreed to pay back the debt you are in.

So how is it possible to keep my Geraldton house, you ask? It's easier if I explain the basic theory behind the Bankruptcy process as administered by the trustee, then you'll have a clearer idea.

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

Within that regulatory framework, the trustee is to help recover monies owed to your creditors, that is accomplished 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 other role is to sell any assets that can contribute to paying your debts.

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

A quick word of advice here if you have a house in Geraldton and are looking at Bankruptcy: get a professional 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 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, provided you keep up to date with your repayments then the bank really wants you in there at all costs. Essentially however it's not the bank's call if the trustee establishes 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 put down the value of your house and the level 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 home, 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 provide two valuations: one for a quick sale and one for a well marketed non time sensitive sale. These days 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 control the result. The idea is that you want a sound sell now figure.

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

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

When it involves Bankruptcy, this is just one of probably 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 property in bankruptcy also. I need to 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 really want to learn more about what to do, where to turn and what questions to ask about Bankruptcy, then feel free to contact Bankruptcy Experts Geraldton on 1300 795 575, or visit our website: www.bankruptcyexpertsGeraldton.com.au.