Bankruptcy Darwin, What is the Deal with Debts?

Precisely what Debts are cleared away if I go Bankrupt?

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

But, simply put 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 such as HECS or FEE-HELP. These debts are not eliminated 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 actual security connected to it. So for instance if you buy a new car for $40,000 dollars the security for this car is the actual car itself.

So, can my secured debts be cleared away 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 can be wiped but the asset needs to be sold or returned. This is just one component that, when it comes to Bankruptcy, it is vital to get professional assistance - like that offered at Fresh Start Solutions Darwin.

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

Yes they can, both business and personal debts owing to the ATO can be erased with bankruptcy. If you have a business with any type of debts find some advice because it is not always so basic. Feel free to call us right here over at Fresh Start Solutions Darwin if you have any questions on 1300 818 575. Or feel free to go to our website: www.freshstartsolutions.com.au/bankruptcy-Darwin.com.au

What about my business or Company debts?

Sometimes when it comes to 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 Fresh Start Solutions Darwin we specialise in business and personal debts so call us here at Fresh Start Solutions Darwin if you have any questions regarding Bankruptcy on 1300 818 575. Or feel free to go to our website: www.freshstartsolutions.com.au/bankruptcy-Darwin.com.au

Bankruptcy Darwin, What is the Deal with Debts?

Precisely what Debts are cleared away if I go Bankrupt?

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

But, simply put 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 such as HECS or FEE-HELP. These debts are not eliminated 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 actual security connected to it. So for instance if you buy a new car for $40,000 dollars the security for this car is the actual car itself.

So, can my secured debts be cleared away 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 can be wiped but the asset needs to be sold or returned. This is just one component that, when it comes to Bankruptcy, it is vital to get professional assistance - like that offered at Fresh Start Solutions Darwin.

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

Yes they can, both business and personal debts owing to the ATO can be erased with bankruptcy. If you have a business with any type of debts find some advice because it is not always so basic. Feel free to call us right here over at Fresh Start Solutions Darwin if you have any questions on 1300 818 575. Or feel free to go to our website: www.freshstartsolutions.com.au/bankruptcy-Darwin.com.au

What about my business or Company debts?

Sometimes when it comes to 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 Fresh Start Solutions Darwin we specialise in business and personal debts so call us here at Fresh Start Solutions Darwin if you have any questions regarding Bankruptcy on 1300 818 575. Or feel free to go to our website: www.freshstartsolutions.com.au/bankruptcy-Darwin.com.au

Bankruptcy, Will I lose my Superannuation?

Bankruptcy in Australia can be complicated and difficult to understand. A question we usually get asked here over at Fresh Start Solutions Darwin is 'what happens to my super if I file for Bankruptcy'? The answer for most is simple, if your super is simply in a regulated fund or industry fund like Sunsuper or Host Plus then virtually 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 growing number of members of Self-Managed Super Funds ("SMSFs") over the last few years; the ATO tells us it has increased Australia-wide from 758,589 in 2009 to 1,011,689 in 2014. So what happens to these Superfunds when it concerns Bankruptcy?

Remember Fresh Start Solutions Darwin is not indicating this post is the complete story, if you have any questions feel free to call us on 1300 818 575. Whether you call us or someone else it does not matter, just please don't walk into bankruptcy blind when it comes to your SMSF in truth we advise 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 facing bankruptcy, you will be grouped as a 'disqualified person'. And a disqualified person cannot operate as an Individual Trustee. This poses a problem since usually most of the SMSFs are just 2 people, which means both of these members have to also be the individual trustees. The position of trustee sets a lot of legal rules, and if you are in this role I would highly urge you to become 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 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 after I'm bankrupt?

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

For starters, the SMSF will need to be reorganized. This means that you will need to consider your overall structure and ensure that it is meeting the basic conditions, including things like having a new trustee that is not having 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 reorganizing issues, there is a lot of paperwork to deal with too, and you need to be continuously keeping the ATO informed of what is happening. This suggests you have to let them know that you have a bankruptcy concern with your current trustee, that they are being removed as soon as possible know who the new trustee/director is. The Bankrupt will also 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 unsure call Fresh Start Solutions Darwin for some free advice on 1300 818 575.

What if I use a single member fund?

If you are a single member fund, then you will have to appoint a new director, and it will then end up being their responsibility to oversee the sale and transfer of assets into a managed fund. If there are two or more members, than the bankrupt member will need to resign and the other member will remove the property and halve the proceeds. They would then have to decide if they wish 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 immediately and transfer the liquid assets to the managed fund.

From this you can notice how when it comes to Bankruptcy, even when one single member is running into issues, it can affect the very existence of an SMSF. If you are 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 suggested earlier, a simple solution to your SMSF problem 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 getting proper advice is the best 1st step. If you want to discuss your options further, contact us at Fresh Start Solutions Darwin or visit our website: www.freshstartsolutions.com.au/bankruptcy-Darwin.com.au or just call us on 1300 818 575.

Bankruptcy in Darwin - Will I lose my home 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 nothing worries people more than the notion of losing the family house. Almost every person is sentimentally 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 solution is a resounding maybe. (not very useful, I know) People typically believe 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 strength 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 concept behind the Bankruptcy process as administered by the trustee, then you'll have a more clear picture.

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

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

What this seems like 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 in your house 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 necessarily reflect the price today.

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

You might wonder, why would the bank want bankrupt customers? wouldn't they hope to sell your house and not take the risk? The bank that has nicely lent you the money for your house is creating 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 really wants you in there at all costs. Essentially however it's not the bank's call if the trustee establishes that there is a lot 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 mark the value of your house and the quantity you owe on the house. A tip if you are trying to work out the value of your house: use a registered valuer as this will offer you peace of mind, don't use your neighbours' gut feel suggestions or a real estate agents advice to get to this figure. When you get a valuer out to your house, ensure 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 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 sound sell now figure.

There are two 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 establish your equity position. Secondly, your property may be really worth far more than you thought. Get some suggestions before carrying this out. The number of times I've met clients that have sold their family home of 20 years just to figure out I could of helped them keep it; unfortunately this happens all too often

When it comes to Bankruptcy and houses, another main consideration is ownership, often houses are bought 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 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 possible when it comes to the family home. Bear in mind the non-bankrupt party can buy the bankrupt's part of the property in bankruptcy also. I should repeat this but get some advice 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 talk to Fresh Start Solutions Darwin on 1300 818 575, or visit our website: www.freshstartsolutions.com.au/bankruptcy-Darwin