Tuesday, August 8, 2017

Bankruptcy Mildura, Just what is the Deal with Debts?

Which Debts are cleared away if I go Bankrupt?

The basic answer is that when it concerns Bankruptcy most debts are wiped, and I have included a table 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 which include HECS or FEE-HELP. These debts are not removed when you file for bankruptcy.

What about Secured Debts?
A secured debt is a vehicle loan or a home loan; it is a debt that has some real security affixed to it. So for instance if you buy a new car for $40,000 dollars the security for that car is the actual car itself.

So, can my secured debts be 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 must be sold or returned. This is just one part that, when it comes to Bankruptcy, it is important to get professional assistance - like that offered at Bankruptcy Experts Mildura.

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 form of debts get some advice because it is not always so self-explanatory. Feel free to call us right here at Bankruptcy Experts Mildura if you have any questions on 1300 795 575. Or feel free to visit our website: www.bankruptcyexpertsMildura.com.au

What about my business or Company debts?

Sometimes when it comes to 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 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 Mildura we specialise in business and personal debts so give us a call here at Bankruptcy Experts Mildura if you have any questions about Bankruptcy on 1300 795 575. Or feel free to head to our website: www.bankruptcyexpertsMildura.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 over at Bankruptcy Experts Mildura is 'what happens to my super if I apply 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 comes to Bankruptcy.

What if I have a Self Managed Super Fund?

This is a growing concern, look into the evolving number of members of Self-Managed Super Funds ("SMSFs") over the last few years; the ATO tells us it has expanded Australia-wide from 758,589 in 2009 to 1,011,689 in 2014. So what happens to these Superfunds when it involves Bankruptcy?

Remember Bankruptcy Experts Mildura is not proposing this article is the complete story, if you have any questions feel free to contact us on 1300 795 575. 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 actually we encourage you seek both legal and financial advice before proceeding with any of the actions recommended in this article.

What is a Disqualified Person?

First and foremost, if you are taking into account Bankruptcy, you can not be a part of a SMSF. Why? Because if you are facing bankruptcy, you will be classified as a 'disqualified person'. And a disqualified individual cannot operate as an Individual Trustee. This poses a problem since usually most of the SMSFs are just 2 people, which means the two of these members must also be the individual trustees. The duty of trustee presents a lot of legal rules, and if you are in this position I would highly encourage 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 very destructive to a SMSF and as you can imagine the process of Bankruptcy for a SMSF is rather convoluted.

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

So what takes place 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 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 supply you a 6 month 'grace period' to get this done before you face penalties. And keep in mind, sometimes the best plan would be to simply roll the fund into an industry or corporate fund.

Beyond these large scale restructuring issues, there is a lot of paperwork to deal with too, and you need to be constantly keeping the ATO informed of what is happening. This suggests you ought to let them know that you have a bankruptcy issue with your current trustee, that they are being removed as soon as possible know who the new trustee/director is. The Bankrupt will also 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 not exactly sure call Bankruptcy Experts Mildura 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 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 have to resign and the other member will take away 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 right away and move the liquid assets to the managed fund.

From this you can notice how when it comes to Bankruptcy, even though one single member is running into issues, it can affect the very existence of an SMSF. If you are actually facing this concern 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 basic 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 frustrations outlined above. Bankruptcy is never easy, but getting proper advice is the best initial step. If you want to discuss your options further, give us a call at Bankruptcy Experts Mildura or visit our website: www.bankruptcyexpertsMildura.com.au or just give us a call on 1300 795 575.

Wednesday, January 25, 2017

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

Bankruptcy Mildura is a challenging process, but I know from meeting with thousands facing the possibility of bankruptcy over the years, that practically 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 kids have grown, it's where you take pleasure in life on a day to day basis.

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 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 agreed to pay back the debt you are in.

So how is it possible to keep my Mildura house, you ask? It's easier if I explain the basic guideline behind the Bankruptcy process as administered by the trustee, then you'll have a more clear picture.

The responsibility of the bankruptcy trustee is to firstly abide by the regulation of the bankruptcy act 1966 (it's a very plain 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 accomplished in a bunch of different ways but it mainly comes down to income and assets. The trustees role is to collect payments beyond your income threshold. The further role is to sell off any assets that can contribute to paying back your debts.

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

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

You might wonder, why would the bank want bankrupt clients? wouldn't they want to sell your house and not take the risk? The bank that has kindly lent you the money for your house is earning good money every month in interest out of you, month in month out, provided that you keep up to date with your payments 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 ample equity in your house the trustee will force you and the bank to sell the house.
When you file for bankruptcy you are asked to put down the value of your house and the level you owe on the house. A tip if you are trying to work out the value of your house: use a registered valuer as this will give you peace of mind, don't use your neighbours' gut feel tips or a real estate agents advice to reach this figure. When you get a valuer out to your house, ensure you tell the valuer to value the property for a quick sale, ensure 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 delicate sale. These days 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 reasonable sell now figure.

There are two main reasons this valuation process is critical to you: one you may have peace of mind ascertaining the market value of your house, then afterwards you can easily establish your equity position. Second of all, your property may be really worth a lot more than you thought. Get some guidance before carrying this out. The number of times I've seen clients that have sold their family home of 20 years simply to figure 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 purchased in joint names. Simply put 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 concerns Bankruptcy, this is just one of probably numerous scenarios that are possible when it relates 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 information on this area of Bankruptcy because it is very tricky and every single 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 reach out to Bankruptcy Experts Mildura on 1300 795 575, or visit our website: www.bankruptcyexpertsMildura.com.au.

Thursday, November 17, 2016

Bankruptcy in Maitland - Who exactly do I speak to?

Should I talk to my accountant about Bankruptcy?
The answer seems obvious doesn't it: if anybody knows your financial situation well in Maitland, It's going to be your accountant. However, the short answer is a definite No! It's not that your accountant may not have your best interests at heart when it comes to Bankruptcy, it's that his proficiency lie in helping you save you money at tax time, minimising your tax liability and lodging your BAS.

Most accounting degrees will spend hardly any to no time on bankruptcy, it's generally performed as a post graduate specialty program for those who intend to work in the field. Unless your accountant is an insolvency expert, he will not 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 Maitland, they often tend to be large firms with very nice offices who charge accordingly.

Should I consult my Solicitor about Bankruptcy?
No! You can speak to your solicitor in Maitland but more than likely it won't do you much good. Solicitors are definitely 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 Maitland normally have either a legal or accounting qualifications, 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 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 sizeable price for their expertise.

Should I speak with a financial counsellor about Bankruptcy?
Yes! There are lots of financial counselling services that can help you with this, they have no hidden agendas and they're a superb option for helping you think through your situation when it comes to Bankruptcy. If you find yourself stressing constantly, not sleeping, not eating or over-eating and thinking about money pressures regularly, then get some help.
There are also charities around Maitland like Lifeline that offer a fantastic service. They will be a sounding board if you just need someone to discuss with you what your possibilities are. Don't let your financial trouble destroy your life - ultimately it's just money.

If you really want to learn more about what to do, where to turn and what points to ask about Bankruptcy, then feel free to contact Bankruptcy Experts Maitland on 1300 795 575, or visit our website: www.bankruptcyexpertsMaitland.com.au.

Tuesday, August 9, 2016

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

When people in Mildura come to me planning to talk about Bankruptcy, they are usually loaded with questions. The internet is full of information, but far too much of it is confusing or contradicts itself, so I make it my mission to try and make things more clear. One of the most universal matters is 'Will I lose my business if I declare bankruptcy?' The short answer is no. If you are an owner of a company any shape or size you can maintain your business if you want to. In Mildura, businesses that eventually become insolvent have a few options such as liquidation, voluntary administration and so on. It's people who go bankrupt not businesses.

Bankruptcy is a complicated area so get some skilled advice on this if you have a business. Generally speaking, the debts in a business and personal debts go together when a business owner goes bankrupt. There are several necessary implications for directors of companies when it comes to Bankruptcy in Mildura: A bankrupt can not be a director of a company, so if you have a pty ltd company you will likely need to retire as a director once you're bankrupt.

A restriction that applies when you are actually bankrupt as a business owner is that you may be in your own business as a sole trader only. Generally there are things you must make known as an aspect of that but ultimately you can still run your company. 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 suspenaded once you're bankrupt and consequently you can no longer trade without that license, so make sure you are asking the right questions when it comes to licenses and Bankruptcy in Mildura.

On the other hand 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 rack up heaps of debt in your company, then go bankrupt and then open the doors the next day like nothing at all 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 an issue of talking with the correct people about Bankruptcy. In this situation you may believe you need a liquidator for your business, and you could be right, but keep in mind that every liquidator is distinct and have their own motives. Liquidators earn money from your liquidation - heaps of money - so what advice do you think you will get?

When it comes to Bankruptcy, I believe that giving generic advice in this area is likely unsafe as it can have very substantial implications for directors and business owners. This is due to the fact 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 reduce to the size of the business you run while you are bankrupt. You can employ staff. You can constantly deal with your companies under certain conditions, the main one being you will need to meet the payment terms agreed upon.

So when it comes to Bankruptcy, don't get too upset about what you can and can't do as a business owner, just get the right 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 reach out to Bankruptcy Experts Mildura on 1300 795 575, or visit our website: .bankruptcyexpertsMildura.com.au.

Wednesday, July 6, 2016

Bankruptcy in Mildura - Changes to help Small Business and Entrepreneurs

Do you know just how much Bankruptcy Mildura is changing? The Australian Government at the end of 2015 moved for some progressive changes to the Bankruptcy Laws in Australia. The most significant of these is the length of time that a person is bankrupt for. Now, there is a minimum amount of time that you must stay bankrupt, having said that, this 3 year period may in fact be reduced to just 12 months. So if you are asking about Bankruptcy, this news may be somewhat important to you.

Mark Carnegie in the Financial Review on the 7th December 2015 proposed 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 changes to the issue of Bankruptcy will take 18 months to implement. Mr Carnegie, went on to say in the Financial Review that defending family assets was very 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 argument surrounding this Bankruptcy issue in Mildura that some come up with is that this variation will only invite fraudulent behavior opening pandora's box in a manner of speaking for the unscrupulous to maltreatment of the bankruptcy system. We have taken a look at the minimum, but on the other side of the issue, The government is not proposing to change the maximum term of 8 years if it deems a bankrupt has acted in an unethical or fraudulent way, and there are no propositions to change the repercussions of misrepresenting yourself or financial position when filing for bankruptcy in Australia.

As an insolvency professional in Mildura, I have a fair share of experience when it comes to Bankruptcy. And having dealt with countless bankruptcy cases in Mildura I have never uncovered someone abusing the system or acting in a reckless way as to exploit the bankruptcy laws in Australia. When it comes to Bankruptcy, each week I help a small business owner or entrepreneur go through the very tough task of bankruptcy, not once have I thought they are happy about it. The average small business owner or entrepreneur in Mildura does not start out taking enormous financial risks with the intention to fail. The media loves citing the apparent misuse that will be rampant if these changes occur, what a joke!

A Win for Small Business

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

Truth be told there is a fine line with what the government is trying to do here, because they are trying to balance helping people who have made decisions out of their control, and discouraging people from making errors that land them in trouble and consequently an issue of Bankruptcy. However you likewise don't want to kill the experience and knowledge that business owners have. You undoubtedly don't want to shatter people simply because they have had a sincere failure in a large or small start-up enterprise that has not gone well.

At the big end of town large well established 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 cut down because directors are concerned they'll be personally responsible in an insolvency arrangement if the new venture doesn't work out.

The government's proposed 'safe haven' modifications for directors of companies will allow Australia to more fully explore and innovate, which will make big updates for Bankruptcy. I can not imagine, that these adjustments will be harmful to Australia's economy, in fact these bankruptcy laws will save the tax payer in all areas of health - Especially in the mental health field because the emotional cost of bankruptcy is substantial. When it comes to Bankruptcy in Mildura not a day passes where I don't hear the tragic experiences of relationship failures, thoughts of suicide and the list continues.

Bankruptcy helps save lives, and it could save yours. If you really need some help with your debts in Mildura or are just thinking about Bankruptcy, feel free to contact us here at Bankruptcy Experts Mildura on 1300 795 575, or visit our website:bankruptcyexpertsmildura.com.au

Monday, July 4, 2016

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

When it comes to Bankruptcy Mildura, often people aren't aware that there are both voluntary, and involuntary bankruptcy - both of these have different approaches and policies.

Involuntary bankruptcy arises when a person you owe money to applies to the court to declare you bankrupt. Normally when you get one of these notices, you have 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 documentation in and afterwards you are bankrupt.

You can object to a bankruptcy notice by going to court following the 21 days have expired and put your case forward, to prevent it going to the next level. Other than the way you became bankrupt there is in fact no distinction between Involuntary Bankruptcy and or Voluntary Bankruptcy - once you are simply declared bankrupt, they're managed 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 probable to be made bankrupt by someone, get some tips 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 someone bankrupt you. Once you are bankrupt, it's usually too late.

Voluntary Bankruptcy

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

This question is not the very same for each person of course, but commonly I find that one way you could work it out is to figure out just how long it will take you to pay each 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 spoke 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 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 phone service 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 impact how you have to approach Bankruptcy.

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

So if your credit rating is a big element in trying to decide whether to take part in 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.


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

I don't pretend to know why that is but a few hundred years ago debtors went to prison. These days 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 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 much 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 possible options. When getting some advice, don't forget that there are always alternatives when it involves Bankruptcy in Mildura, so do some legwork, and Good luck!

If you want to learn more about exactly what to do, where to turn and what questions to ask about Bankruptcy, then feel free to speak to Bankruptcy Experts Mildura on 1300 795 575, or visit our website:bankruptcyexpertsMildura.com.au.