Bankruptcy Lismore, So what is the Deal with Debts?

Just 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 included a chart below for you to look at.

But, put simply some of the exceptions are Centrelink Debts, Child Support, Court fines (like speeding fines) along with any debts arising from uninsured Motor-vehicle claims and educational debts for example, 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 absolute security connected to it. So for 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 erased 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 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 might be wiped but the asset has to be sold or returned. This is just one part that, when it comes to Bankruptcy, it is vital to get professional help - like that provided at Bankruptcy Experts Lismore.

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 removed with bankruptcy. If you have a business with any type of debts receive some advice because it is not always so self-explanatory. Feel free to call us here at Bankruptcy Experts Lismore if you have any questions on 1300 795 575. Or feel free to head to our website: www.bankruptcyexpertsLismore.com.au

What about my business or Company debts?

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

Bankruptcy, Will I lose my Superannuation?

Bankruptcy in Australia can be convoluted and confusing. A question we often get asked here over at Bankruptcy Experts Lismore is 'what happens to my super if I declare Bankruptcy'? The solution for most is easy, if your super is simply in a regulated fund or industry fund like Sunsuper or Host Plus then very little 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 expanding 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 Lismore is not implying this post is the complete story, if you have any questions feel free to call us on 1300 795 575. No matter if you call us or someone else it does not matter, just please don't walk into bankruptcy blind when it comes to your SMSF actually we encourage you look for 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 labeled 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 will need to also be the individual trustees. The duty of trustee poses a lot of legal rules, and if you are in this position I would highly urge you to end up being 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 quite detrimental to a SMSF and as you can assume the process of Bankruptcy for a SMSF is rather convoluted.

How much time 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 have to be reorganized. This means that you will want to consider your entire structure and make certain it is meeting the basic conditions, involving 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 keep in mind, sometimes the very best 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 frequently keeping the ATO informed of what is happening. This suggests you have 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 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 uncertain call Bankruptcy Experts Lismore 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 have to appoint a new director, and it will then be their obligation to oversee the sale and relocation 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 would like to remain as a single member SMSF, or if they want 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 move the liquid assets to the managed fund.

From that you can notice how when it comes to Bankruptcy, even though one single member is facing issues, it can affect the very existence of an SMSF. If you are at this point facing this matter yourself, or with a partner in a SMSF, please seek financial advice to make sure you are fulfilling the ATO requirements.

A simple solution ...

As I recommended earlier, a simple 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 Lismore or visit our website: www.bankruptcyexpertsLismore.com.au or just give us a call on 1300 795 575.

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

Bankruptcy Lismore is a confusing process, but I know from meeting with thousands facing the possibility of bankruptcy over the years, that virtually nothing worries people more than the notion of losing the family home or apartment. Almost everybody is on an emotional level connected to their home - it's where the children have grown up, it's where you enjoy life on a day to day basis.

Will you lose your home if you go bankrupt? The reply is a resounding maybe. (not very helpful, I know) People generally think 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 perk 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 Lismore 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 picture.

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

Within that regulatory framework, the trustee is to help recuperate 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 your income threshold. The further role is to sell off any assets that can contribute to paying back your debts.

What this seems is that yes the trustee will sell your house right? Not normally. The only reason the trustee will sell 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 regions have been heading south so what you paid 4 years ago may not automatically reflect the price today.

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

You might wonder, why would the bank want bankrupt clients? wouldn't they prefer to sell your house and not take the risk? The bank that has generously lent you the money for your house is generating 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 really wants you in there at all costs. Essentially 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 make a note of the value of your house and the quantity 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 provide 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 property, make certain you tell the valuer to value the property for a quick sale, make sure you mow the lawn and don't leave the kitchen in a mess also.

Valuers used to give 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 life-like sell now figure.

There are two main reasons this valuation system is critical to you: one you will definitely have peace of mind ascertaining the market value of your house, and then you can easily build your equity position. Second of all, your home may be really worth much more than you thought. Get some advice before doing this. The amount of times I've seen 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 primary consideration is ownership, often 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 does not, the equity is only factored on the 50 % of the property.

When it comes to Bankruptcy, this is just one of likely 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 portion of the house in bankruptcy also. I have to repeat this but get some help 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 speak to Bankruptcy Experts Lismore on 1300 795 575, or visit our website: www.bankruptcyexpertsLismore.com.au.

Bankruptcy in Lismore - Who do I talk to?

Should I talk to my accountant about Bankruptcy?

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

Most accounting degrees will invest hardly any to no time on insolvency, it's generally carried out as a post graduate speciality course for those who intend to work in the field. Unless your accountant is an insolvency expert, he wouldn't know that a lot about the implications 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 Lismore, they often tend to be large firms with very nice office spaces who charge accordingly.

Should I talk with my Solicitor about Bankruptcy?

No! You can speak to your solicitor in Lismore but more than likely it won't do you much good. Solicitors are really good at undertaking 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 Lismore tend to have either a legal or accounting experience, and the main reason for that is simply that you can't enrol in the post graduate study to become a qualified insolvency practitioner until 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 a substantial price for their expertise.

Should I talk to a financial counsellor about Bankruptcy?

Yes! There are a lot of financial counselling services to guide you through this, they have no hidden agendas and they're an excellent option for letting you analyze your situation when it comes to Bankruptcy. If you end up freaking out constantly, not sleeping, not eating or over-eating and thinking of money pressures at all times, then get some help.

There are also charities around Lismore like Lifeline that offer a terrific service. They will be a sounding board if you just need somebody to go over with you what your options are. Don't let your financial issue destroy your life - ultimately it's just money.

If you like to learn more about what to do, where to turn and what matters to ask about Bankruptcy, then feel free to call Bankruptcy Experts Lismore on 1300 795 575, or visit our website: www.bankruptcyexpertsLismore.com.au.

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

When people in Lismore come to me looking to discuss Bankruptcy, they are typically filled with questions. The internet has plenty of information, but far too much of it is confusing or contradicts itself, so I make it my mission to try and make it clearer. One of the most universal issues is 'Will I lose my business if I declare bankruptcy?' The quick answer is no. If you are an owner of a company any shape or size you can maintain your business if you wish to. In Lismore, businesses that are insolvent have a few options like liquidation, voluntary administration and so on. It's individuals who go bankrupt not businesses.

Bankruptcy is a complicated area so get some qualified advice on this one if you have a business. Generally speaking, the financial obligations 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 comes to Bankruptcy in Lismore: 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 constraint that applies when you are bankrupt as a business owner is that you may be in your own business as a sole trader only. Certainly there are things you will need to make known as an aspect of that but effectively 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 therefore you can not trade without that license, so make sure you are asking the ideal questions when it concerns licenses and Bankruptcy in Lismore.

However 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 practically nothing had happened. There are laws in place to stop what is called phoenix companies growing out of the ashes of an old company.

Having said that, it's just a point of speaking with the best people about Bankruptcy. In this situation you may believe you need a liquidator for your business, and you might be right, but keep in mind that every liquidator is distinct and have their own motives. Liquidators profit from your liquidation - heaps of money - so what advice do you believe you will get?

When it comes to Bankruptcy, I believe that giving generic advice in this area is likely risky as it can have very severe implications for directors and business owners. This is due to the fact 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 principles however, that you may benefit from. There is no limitation to the size of the business you run while you are bankrupt. You can employ staff. You can constantly deal with your distributors 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 overly worried about what you can and can't do as a business owner, just get the appropriate advice ... If you wish to learn more about what to do, where to turn and what questions to ask about Bankruptcy, then feel free to contact Bankruptcy Experts Lismore on 1300 795 575, or visit our website:.bankruptcyexpertsLismore.com.au.

Bankruptcy in Lismore - Changes to aid Small Business and Entrepreneurs

Do you have knowledge of how much Bankruptcy Lismore is changing? The Australian Government at the end of 2015 posed some inherent 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. Currently, there is a minimum amount of time that you must continue to be bankrupt, but, this 3 year period may in fact be reduced to just 12 months. So if you are inquiring about Bankruptcy, this news may be somewhat important to you.

Mark Carnegie in the Financial Review on the 7th December 2015 recommended 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 updates to the issue of Bankruptcy will take 18 months to implement. Mr Carnegie, went on to say in the Financial Review that protecting family assets was important because "banks just terrorise small business and the mental health consequences to society are enormous".

The problem is Australia's bankruptcy laws discouraged 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 issue about this Bankruptcy issue in Lismore that some come up with is that this change will only motivate fraudulent behavior opening pandora's box so to speak for the unscrupulous to misuse of the bankruptcy system. We have taken a look at the minimum, but on the other side of the issue, The government is not submitting 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 recommendations to change the effects of misrepresenting yourself or financial situation when filing for bankruptcy in Australia.

As an insolvency professional in Lismore, I have a fair share of experience when it concerns Bankruptcy. And having dealt with thousands of bankruptcy cases in Lismore I have never struck someone abusing the system or acting in an unaccountable way as to exploit the insolvency laws in Australia. When it comes to Bankruptcy, each week I help a small business owner or entrepreneur look at the very tough task of bankruptcy, not once have I really felt they are happy about it. The normal small business owner or entrepreneur in Lismore does not start out taking enormous financial risks with the intention to fail. The media really loves citing the apparent abuse that will be rampant if these changes occur, what a joke!

A Win for Small Business

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

Now there is a fine line with what exactly the government is trying to do here, since they are trying to balance helping people who have made decisions out of their control, and dissuading people from making problems that land them in trouble and consequently an issue of Bankruptcy. However you also don't want to eliminate the experience and knowledge that business owners have. You certainly don't want to shatter people simply because they have had a sincere failure in a large or small start-up venture that has not worked out.

At the major end of town large developed 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 insolvency were minimized because directors are troubled they'll be personally responsible in an insolvency arrangement if the new endeavor doesn't work out.

The government's proposed 'safe haven' changes for directors of companies will allow Australia to more fully explore and innovate, which will make big changes for Bankruptcy. I can not imagine, that these adjustments will be detrimental to Australia's economy, in fact 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 enormous. When it comes to Bankruptcy in Lismore not a day passes where I don't hear 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 really need some help with your debts in Lismore or are just thinking of Bankruptcy, feel free to contact us here at Bankruptcy Experts Lismore on 1300 795 575, or visit our website: bankruptcyexpertslismore.com.au

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

When it comes to Bankruptcy Lismore, commonly people aren't aware that there are both voluntary, and involuntary bankruptcy - both have distinct methods and guidelines.

Involuntary bankruptcy occurs when somebody you owe money to involves the court to declare you bankrupt. Commonly when you get one of these particular notices, you have actually 21 days to pay all the debt. If you don't, then the creditor returns to the court and asks the court to provide a sequestration order that declares you bankrupt. A trustee is assigned, and then you have 14 days to get the paperwork in and after that you are bankrupt.

You can contest a bankruptcy notice by going to court right after the 21 days have expired and put your case forward, to stop it going to the next level. Other than the way you became bankrupt there is in reality no distinction between Involuntary Bankruptcy and or Voluntary Bankruptcy - once you are declared bankrupt, they're overseen to in the same way.

However, when it comes to Bankruptcy for this, the stress and anxiety, torment and fear that accompanies this process is incredible. If you think you are more than likely to be made bankrupt by someone, get some help and act on that advice. Generally I've found it's always more ideal to know what you can and can't do before you have somebody bankrupt you. Once you are bankrupt, it's normally too late.

Voluntary Bankruptcy

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

This question is not the very same for everybody of course, but usually I find that one way you could work it out is to figure out just how long it will take you to pay each 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 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 telephone 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 very seriously damaged for that period of time - and all of this will affect how you have to approach Bankruptcy.

In many ways, the ease with which companies/credit providers can default your credit file is unethical. The punishment doesn't seem to amount to the crime in my book. So if you currently have defaults on your credit report for 5 years, remember that bankruptcy is on your credit file for a total 7 years then its wiped off completely.

So if your credit rating is a big factor 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 pay back the money and nevertheless 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 most 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 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. Compared with countries like the United States, our bankruptcy laws are extremely good.

I don't claim to know why that is but a few hundred years ago debtors went to prison. Nowadays I suppose the government assumes 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 costs the taxpayer anyway.

Bankruptcy wipes every one of your debts including ATO debts except for 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 insured.

There is a lot 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 available options. When getting some advice, remember that there are always possibilities when it concerns Bankruptcy in Lismore, so do some research, and Good luck!

If you want to find out more about just what to do, where to turn and what questions to ask about Bankruptcy, then don't hesitate to talk to Bankruptcy Experts Lismore on 1300 795 575, or visit our website:.bankruptcyexpertsLismore.com.au.