Monday, August 7, 2017

Bankruptcy Darwin, So what is the Deal with Debts?


Just what Debts are removed if I go Bankrupt?

The basic answer is that when it comes to Bankruptcy most debts are wiped, and I have provided 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) and any debts arising from uninsured Motor-vehicle claims and educational debts for instance, HECS or FEE-HELP. These debts are not removed 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 real security linked 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 wiped out 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 might be wiped but the asset will need to be sold or returned. This is just one facet that, when it comes to Bankruptcy, it is necessary to get professional advice - like that readily available at Bankruptcy Advice Darwin.

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 find some advice because it is not always so easy. Feel free to call us here over at Bankruptcy Advice Darwin if you have any type of questions on 1300 879 867. Or feel free to go to our website: www.bankruptcy-advice.com.au/Darwin.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. Generally you may have to liquidate a company to deal with the debt this 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 Bankruptcy Advice Darwin we specialise in business and personal debts so contact us here at Bankruptcy Advice Darwin if you have any questions about Bankruptcy on 1300 879 867. Or feel free to visit our website: www.bankruptcy-advice.com.au/Darwin.com.au

Monday, May 22, 2017

Bankruptcy, Will I lose my Superannuation?



Bankruptcy in Australia can be involved and difficult to understand. A question we typically get asked here at Bankruptcy Advice Darwin is 'what happens to my super if I file for Bankruptcy'? The reply for most is straightforward, if your super is actually in a regulated fund or industry fund like Sunsuper or Host Plus then absolutely nothing happens; your super is 100 % safe when it comes to Bankruptcy.



What if I have a Self Managed Super Fund?

This is a growing concern, take into account the developing number of members of Self-Managed Super Funds ("SMSFs") in 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 involves Bankruptcy?

Remember Bankruptcy Advice Darwin is not indicating this post is the complete story, if you have any questions feel free to contact us on 1300 879 867. Whether you call us or somebody else it doesn't matter, just please don't walk into bankruptcy blind when it comes to your SMSF actually we recommend you look for 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 considering Bankruptcy, you can not be a part of a SMSF. Why? Because if you are facing bankruptcy, you will be categorized 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 must also be the individual trustees. The role of trustee poses a lot of legal rules, and if you are in this role I would highly encourage you to become familiar with them all-- including the fact that you can not 'know or suspect' that one of you are bankrupt. So you can see how an individual bankruptcy can be very 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 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 need to be reorganized. This means that you will have to consider your entire structure and ensure that it is meeting the basic conditions, including having a new trustee that is not encountering issues with Bankruptcy. The Australian Tax office will give you a 6 month 'grace period' to get this done before you face penalties. And bear in mind, 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 frequently keeping the ATO informed of what is happening. This indicates 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.

During 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 Advice Darwin for some free advice on 1300 879 867.

What if I have a single member fund?

If you are a single member fund, then you will need to appoint a new director, and it will then be 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 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 want to roll it all into a managed fund. If both members are entering bankruptcy, then they would definitely need to sell all assets right away and move 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 trouble 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 proposed earlier, a simple 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 problems outlined above. Bankruptcy is never easy, but getting proper advice is the best initial step. If you want to discuss your options further, contact us at Bankruptcy Advice Darwin or visit our website: www.bankruptcy-advice.com.au/Darwin.com.au or just call us on 1300 879 867.

Thursday, January 19, 2017

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


Bankruptcy Darwin is a difficult to understand process, but I know from meeting with thousands facing the prospect of bankruptcy over the years, that virtually nothing troubles people more than the notion of losing the family home or apartment. Almost everyone is on an emotional level connected to their home - it's where the kids have grown up, it's where you take pleasure in 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 typically believe 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 idea behind the Bankruptcy process as administered by the trustee, then you'll have a clearer image.

The duty of the bankruptcy trustee is to firstly agree to the regulation of the bankruptcy act 1966 (it's a very dry read about 600 pages if you are serious).

Within that regulatory framework, the trustee is to help recuperate 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 and above your income threshold. The other role is to sell any assets that can contribute to repaying 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 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 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 Darwin and are looking at Bankruptcy: get a professional to help you through this process, there are plenty of variables in these scenarios that have to be considered.

You might wonder, why would the bank want bankrupt clients? wouldn't they need to sell your house and not take the risk? The bank that has nicely lent you the money for your house is making good money every month in interest out of you, month in month out, just as long as you keep up to date with your fees then the bank wants you in there at all costs. Ultimately however it's not the bank's call if the trustee figures out 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 write down the value of your house and the amount 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 recommendations or a real estate agents advice to get to this figure. When you get a valuer out to your home, 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 provide two valuations: one for a quick sale and one for a well marketed non time delicate sale. These days that's not the case, but if you meet them and tell them you need to sell the house in the next 30 days you may sway 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 likely have peace of mind ascertaining the market value of your house, and then you can easily create your equity position. The second thing is, your home may be really worth even more than you thought. Get some advice before carrying this out. The number of times I've met with clients that have sold their family home of 20 years simply to discover I could of helped them keep it; unfortunately this happens all too often

When it comes to Bankruptcy and houses, another major 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 probably numerous scenarios that are likely when it relates 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 assistance 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 speak with Bankruptcy Advice Darwin on 1300 879 867, or visit our website: www.bankruptcy-advice.com.au/darwin

Wednesday, November 16, 2016

Bankruptcy in Darwin - Who exactly do I talk to?


Should I consult with my accountant about Bankruptcy?
The answer seems clear doesn't it: if anybody knows your financial circumstance well in Darwin, It's going to be your accountant. However, the short answer is a definite No! It's not that your accountant won't have your best interests at heart when it comes to Bankruptcy, it's that his specialization lie in helping you save you money at tax time, lowering your tax liability and lodging your BAS.

Most accounting degrees will put in hardly any to no time on bankruptcy, it's generally performed as a post graduate speciality program for those who want to work in the field. Unless your accountant is an insolvency specialist, he will not 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 manage to find an insolvency accounting firm in Darwin, they have the tendency to be large firms with very nice offices who charge accordingly.

Should I consult my Solicitor about Bankruptcy?
No! You can speak with your solicitor in Darwin but more than likely it won't do you much good. Solicitors are definitely 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 generally have either a legal or accounting background, and the main reason for that is simply that you can't enrol in the post graduate study to become a qualified insolvency practitioner except if you have a law or accounting degree.

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

Should I speak with a financial counsellor about Bankruptcy?
Yes! There are lots of financial counselling services to assist you with this, they have no hidden agendas and they're a remarkable option for letting you analyze your circumstance when it comes to Bankruptcy. If you find yourself stressing out constantly, not sleeping, not eating or over-eating and thinking of money pressures regularly, then get some help.
There are also charities around Darwin like Lifeline that offer a wonderful service. They will be a sounding board if you just need a person to discuss with you what your alternatives are. Don't let your financial problem destroy your life - in the end it's just money.


If you wish to learn more about what to do, where to turn and what points to ask about Bankruptcy, then feel free to speak to Bankruptcy Advice Darwin on 1300 879 867, or visit our website: www.bankruptcy-advice.com.au/Darwin .

Monday, August 8, 2016

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


When people in Darwin come to me planning to discuss Bankruptcy, they are always packed with questions. The internet is full of information, but far too much of it is baffling or contradicts itself, so I make it my mission to try and make it clearer. One of the most general matters 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 keep your business if you want to. In Darwin, businesses that end up being insolvent have a few options for instance, liquidation, voluntary administration and so on. It's people who go bankrupt not companies.

Bankruptcy is a complex area so get some skilled advice on this 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 pertains to Bankruptcy in Darwin: A bankrupt can not be a director of a company, so if you have a pty ltd company you will definitely need to retire as a director as soon as you're bankrupt.

A constraint that applies when you are bankrupt as a business owner is that you can be in your own business as a sole trader only. There are things you will need to reveal as a part of that but basically you can still run your business. For some business owners, bankruptcy impacts their ability to run the business because of the licensing issues. For example, 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 comes to licenses and Bankruptcy in Darwin.

Having said that 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 and afterwards open the doors the next day like not a thing had happened. There are laws in place to stop what is called phoenix companies appearing out of the ashes of an old company.

Having said that, it's just a point of talking with the suitable people about Bankruptcy. In this circumstance you may think you need a liquidator for your business, and you may be right, but bear in mind that every liquidator is different and have their own motives. Liquidators profit from your liquidation - heaps of money - so exactly what advice do you think you will get?

When it comes to Bankruptcy, I believe that giving generic advice in this area is likely perilous as it can have very significant implications for directors and business owners. This is considering that it is just one of those cases where what the right advice for one business owner is the incorrect advice for the other. There are some fundamentals however, that you may benefit from. There is no restriction to the size of the business you run while you are bankrupt. You can employ staff. You can constantly deal with your manufacturers 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 consult Bankruptcy Advice Darwin on 1300 879 867, or visit our website:bankruptcy-advice.com.au/Darwin


Monday, July 4, 2016

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 - each have unique approaches and rules.

Involuntary bankruptcy happens when a person you owe money to applies to the court to declare you bankrupt. Commonly when you get one of those notices, you have normally 21 days to pay all the debt. If you don't, then the creditor returns to the court and asks the court to issue a sequestration order that declares you bankrupt. A trustee is assigned, and then you have 14 days to get the documents in then afterwards you are bankrupt.

You can object to a bankruptcy notice by going to court right 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 difference between Involuntary Bankruptcy and or Voluntary Bankruptcy - once you are declared bankrupt, they're conducted to in the exact same way.

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

Voluntary Bankruptcy

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

This question is not the very same for everyone of course, but basically I find that one way you could work it out is to figure out 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 help 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 overlook 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 sit 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 affect how you have to approach Bankruptcy.

In many ways, the ease with which companies/credit providers can default your credit file is unjustifiable. The punishment doesn't seem to amount to 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 wiped off completely.

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


Bankruptcy

I have stated the word a few times now, but when it comes down to it, Bankruptcy is the biggest part, and the part more 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 provisions are very generous: you can go bankrupt owing millions of dollars and after 3 years it's all finished with no strings attached. Compared with countries like the United States, our bankruptcy laws are really generous.

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 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 this and Bankruptcy in general but the purpose of this blog was to help you decide between a few readily available options. When getting some advice, bear in mind that there are always alternatives when it involves Bankruptcy in Darwin, so do some groundwork, and Good luck!


If you would like to learn more about exactly what to do, where to turn and what questions to ask about Bankruptcy, then feel free to consult with Bankruptcy Advice Darwin on 1300 879 867, or visit our website: bankruptcy-advice.com.au/Darwin .

Monday, May 23, 2016

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


Bankruptcy Darwin is a challenging process, and you should be sure you get the right recommendations. And when it comes to your income being affected, the answer to the question is maybe. The first thing you have to know about going bankrupt is there is no limit on how much you can earn. However, I will say that your income is a significant consideration when working through when it comes to Bankruptcy.

The very first thing you need to know about this area of Bankruptcy is 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 sum you earn each year. A dependant is someone who lives with you and earns less than $3,124 per year (regardless of their age).

You can apply for a hardship variation that increases the threshold amount, if you have financial commitments in Darwin such as medical, child care, considerable travel to and from your job, or a situation where your partner used to work but is not able to contribute to the household income.

Some of the insightful 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 considered, for example if you pay $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 ideal to get qualified advice. The reason you will need to consider your income as a part of the Big 5 questions here is that bankruptcy is in some cases not an economically viable 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 so long as that doesn't take you over your threshold income limits.

If you believe that when it comes to Bankruptcy, your situation is more challenging, then just get expert advice in Darwin. I may seem like a broken record, but keep in mind that it's always a great idea to overcome these options before declaring bankruptcy, because once you have filed the paperwork it's too late to change your mind.


If you intend to find out more about what to do, where to turn and what issues to ask about Bankruptcy, then don't hesitate to contact Bankruptcy Advice Darwin on 1300 879 867, or explore our website: bankruptcy-advice.com.au/Darwin .