Bankruptcy Cairns, What is the Deal with Debts?

Which Debts are eliminated if I go Bankrupt?

The simple 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) and even 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 vehicle loan or a home loan; it is a debt that has some absolute 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 erased if I file for bankruptcy?

Yes. If you have a car loan for $40,000 you can have that debt eliminated if you simply return 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 aspect that, when it comes to Bankruptcy, it is important to get professional guidance - like that available at Bankruptcy Experts Cairns.

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 eliminated with bankruptcy. If you have a business with any form of debts get some advice because it is not always so easy. Feel free to call us here at Bankruptcy Experts Cairns if you have any questions on 1300 795 575. Or feel free to head to our website: www.bankruptcyexpertsCairns.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 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 Cairns we specialise in business and personal debts so call us here at Bankruptcy Experts Cairns if you have any questions about Bankruptcy on 1300 795 575. Or feel free to explore our website: www.bankruptcyexpertsCairns.com.au

Bankruptcy, Will I lose my Superannuation?

Bankruptcy in Australia can be involved and perplexing. A question we usually get asked here at Bankruptcy Experts Cairns is 'what happens to my super if I apply for Bankruptcy'? The answer for most is easy, if your super is simply in a regulated fund or industry fund like Sunsuper or Host Plus then absolutely 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, take into consideration the increasing number of members of Self-Managed Super Funds ("SMSFs") over the last few 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 Experts Cairns is not proposing this short article is the entire story, if you have any questions feel free to consult with us on 1300 795 575. Whether you call us or somebody else it does not matter, just please don't walk into bankruptcy blind when it comes to your SMSF actually we advise you find 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 thinking about 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 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 role of trustee causes a lot of legal rules, and if you are in this position I would highly urge 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 very 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 comes about 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 have to consider your complete structure and ensure 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 supply you a 6 month 'grace period' to get this done before you face penalties. And consider, sometimes the most suitable 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 continuously keeping the ATO informed of what is happening. This suggests you need 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.

In 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 Cairns 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 end up being 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 need to resign and the other member will clear away the property and halve the proceeds. They would then want to decide if they wish to remain as a single member SMSF, or if they would like to roll all of it 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 see how when it comes to Bankruptcy, even when one single member is facing issues, it can affect the very existence of an SMSF. If you are at the moment facing this concern 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 proposed earlier, a straightforward solution to your SMSF situation 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 finding proper advice is the best first step. If you want to discuss your possibilities further, give us a call at Bankruptcy Experts Cairns or visit our website: www.bankruptcyexpertsCairns.com.au or just give us a call on 1300 795 575.

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

Bankruptcy Cairns is a difficult to understand process, but I know from meeting with thousands facing the possibility of bankruptcy over the years, that nothing at all concerns people more than the thought of losing the family house. Almost everyone is psychologically connected to their home - it's where the kids have grown, it's where you take pleasure in life on a day to day base.

Will you lose your house if you go bankrupt? The solution is a resounding maybe. (not very helpful, I know) People generally believe it's an inevitable consequence and a part of Bankruptcy, and hence 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 Cairns 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 idea.

The purpose 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 serious).

Within that regulatory framework, the trustee is to help recover monies owed to your creditors, that is executed 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 is that yes the trustee will sell your house right? Not necessarily. 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 much more since the GFC as house prices in many regions have been heading south so what you paid 4 years ago may not really reflect the price today.

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

You might wonder, why would the bank want bankrupt customers? wouldn't they like to sell your house and not take the risk? The bank that has kindly lent you the money for your house is creating good money every month in interest out of you, month in month out, provided that you keep up to date with your repayments then the bank really wants you in there at all costs. Ultimately however it's not the bank's call if the trustee determines that there is lots 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 amount of money you owe on the house. A tip if you are aiming 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 recommendations or a real estate agents advice to reach this figure. When you get a valuer out to your house, make sure 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 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 sensible sell now figure.

There are two reasons this valuation process is critical to you: one you will definitely have peace of mind ascertaining the market value of your house, and afterwards you can easily set up your equity position. The second thing is, your house may be really worth much more than you thought. Get some suggestions before doing this. The amount of times I've seen 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 comes to Bankruptcy and houses, another notable consideration is ownership, often houses are acquired 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 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 home in bankruptcy also. I have to 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 would like to learn more about what to do, where to turn and what questions to ask about Bankruptcy, then feel free to call Bankruptcy Experts Cairns on 1300 795 575, or visit our website: www.bankruptcyexpertsCairns.com.au.

Bankruptcy in Cairns - Who exactly do I talk to?

Should I get in touch with my accountant about Bankruptcy?

The answer seems obvious doesn't it: if anyone knows your financial circumstance well in Cairns, It's going to be your accountant. However, the short answer is a definite No! It's not that your accountant doesn't have your best interests in mind when it comes to Bankruptcy, it's that his expertise lie in helping you save you money at tax time, minimizing your tax liability and lodging your BAS.

Most accounting degrees will invest very little to no time on insolvency, it's generally done as a post graduate speciality course 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 effects 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 Cairns, they often tend to be large firms with very nice offices who charge accordingly.

Should I speak to my Solicitor about Bankruptcy?

No! You can talk with your solicitor in Cairns but more than likely it won't do you much good. Solicitors are certainly 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 relates to Bankruptcy, the specialists in Cairns normally have either a legal or accounting experience, and the reason for that is simply that you can't start in the post graduate study to become a qualified insolvency practitioner unless you have a law or accounting degree.

Just like there are few insolvency accounting firms, there are very few insolvency legal practices in Australia, and yes if you choose one you will pay a sizeable price for their expertise.

Should I speak to a financial counsellor about Bankruptcy?

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

There are also charities around Cairns like Lifeline that offer a fantastic service. They will be a sounding board if you just need someone to go over with you what your choices are. Don't let your financial trouble 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 problems to ask about Bankruptcy, then feel free to get in touch with Bankruptcy Experts Cairns on 1300 795 575, or visit our website: www.bankruptcyexpertsCairns.com.au.

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

When people in Cairns come to me looking to talk about Bankruptcy, they are always loaded 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 it more clear. One of the most simple considerations is 'Will I lose my business if I declare bankruptcy?' The short answer is no. If you are a manager of a business any shape or size you can maintain your business if you wish to. In Cairns, businesses that eventually are insolvent have a few options for instance liquidation, voluntary administration and so on. It's people who go bankrupt not companies.

Bankruptcy is a complicated area so get some professional advice on this one if you have a business. Generally speaking, the financial obligations in a business and personal debts go together when a business owner goes bankrupt. There are several crucial implications for directors of companies when it pertains to Bankruptcy in Cairns: A bankrupt can not be a director of a company, so if you have a pty ltd company you will need to resign as a director once you're bankrupt.

A limitation that applies when you are bankrupt as a business owner is that you may be in your very own business as a sole trader only. There are things you have to reveal as a part of that but in essence you can still run your business. For some business owners, bankruptcy impacts 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 consequently you can no longer trade without that license, so make sure you are asking the best questions when it comes to licenses and Bankruptcy in Cairns.

However 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 after that open the doors the next day like nothing had happened. There are laws in place to stop what is called phoenix companies popping up out of the ashes of an old company.

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

When it comes to Bankruptcy, I think that giving generic advice in this area is potentially damaging as it can have very serious implications for directors and business owners. This is considering that it is one of those cases where what the right advice for one business owner is the wrong advice for the other. There are some basics however, that you may benefit from. There is no limitation to the size of the business you run even though you are bankrupt. You can employ staff. You can continue to deal with your companies 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 appropriate advice ... If you need to learn more about what to do, exactly where to turn and what questions to ask about Bankruptcy, then feel free to call Bankruptcy Experts Cairns on 1300 795 575, or visit our website: .bankruptcyexpertsCairns.com.au.

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

When people in Cairns come to me looking to talk about Bankruptcy, they are always loaded 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 it more clear. One of the most simple considerations is 'Will I lose my business if I declare bankruptcy?' The short answer is no. If you are a manager of a business any shape or size you can maintain your business if you wish to. In Cairns, businesses that eventually are insolvent have a few options for instance liquidation, voluntary administration and so on. It's people who go bankrupt not companies.

Bankruptcy is a complicated area so get some professional advice on this one if you have a business. Generally speaking, the financial obligations in a business and personal debts go together when a business owner goes bankrupt. There are several crucial implications for directors of companies when it pertains to Bankruptcy in Cairns: A bankrupt can not be a director of a company, so if you have a pty ltd company you will need to resign as a director once you're bankrupt.

A limitation that applies when you are bankrupt as a business owner is that you may be in your very own business as a sole trader only. There are things you have to reveal as a part of that but in essence you can still run your business. For some business owners, bankruptcy impacts 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 consequently you can no longer trade without that license, so make sure you are asking the best questions when it comes to licenses and Bankruptcy in Cairns.

However 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 after that open the doors the next day like nothing had happened. There are laws in place to stop what is called phoenix companies popping up out of the ashes of an old company.

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

When it comes to Bankruptcy, I think that giving generic advice in this area is potentially damaging as it can have very serious implications for directors and business owners. This is considering that it is one of those cases where what the right advice for one business owner is the wrong advice for the other. There are some basics however, that you may benefit from. There is no limitation to the size of the business you run even though you are bankrupt. You can employ staff. You can continue to deal with your companies 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 appropriate advice ... If you need to learn more about what to do, exactly where to turn and what questions to ask about Bankruptcy, then feel free to call Bankruptcy Experts Cairns on 1300 795 575, or visit our website: .bankruptcyexpertsCairns.com.au.

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

When it comes to Bankruptcy Cairns, quite often people aren't aware that there can be both voluntary, and involuntary bankruptcy - both have distinct methods and guidelines.

Involuntary bankruptcy happens when someone you owe money to involves the court to declare you bankrupt. Typically when you get one of those notices, you have actually 21 days to pay all the debt. If you don't, then the creditor returns to the court and requests the court to issue a sequestration order that declares you bankrupt. A trustee is selected, and then you have 14 days to get the documents in and afterwards you are bankrupt.

You can challenge a bankruptcy notice by going to court right after the 21 days have expired and put your case forward, to avoid 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 declared bankrupt, they're overseen to in the same way.

However, when it concerns Bankruptcy for this, the stress and anxiety, torment and fear that accompanies this process is incredible. If you think you are in all likelihood to be made bankrupt by someone, get some help 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 somebody bankrupt you. Once you are bankrupt, it's generally too late.

Voluntary Bankruptcy

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

This question is not the very same for everybody of course, but generally I find that one way you could work it out is to figure out just how long it will take you to pay all 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 level she was paying her account, and it was 35 years! Imagine 35 years for one credit card bill.

Credit rating damage can really help you think this through. If you move house and overlook 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 remain 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 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 equal the crime in my book. So if you actually 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 detail 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 change is that with a DA or PIA you pay back 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 element more people are afraid of when they come to me to review 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 really 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 believes 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 purpose 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 comes to Bankruptcy in Cairns, so do some legwork, and Good luck!

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