Bankruptcy Sydney, What is the Deal with Debts?

What Debts are erased if I go Bankrupt?

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

But, simply put some of the exceptions are Centrelink Debts, Child Support, Court fines (like speeding fines) along with any debts arising from uninsured Motor-vehicle claims and educational debts for example, HECS or FEE-HELP. These debts are not cleared away 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 linked 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 wiped out 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 might be wiped but the asset has to be sold or returned. This is just one facet that, when it comes to Bankruptcy, it is vital to get professional help - like that you can find at Bankruptcy Advice Sydney.

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 find some advice because it is not always so simple. Feel free to call us here at Bankruptcy Advice Sydney if you have any questions on 1300 879 867. Or feel free to visit our website: www.bankruptcy-advice.com.au/Sydney.com.au

What about my business or Company debts?

In some cases when it concerns 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 Advice Sydney we specialise in business and personal debts so contact us here at Bankruptcy Advice Sydney if you have any questions regarding Bankruptcy on 1300 879 867. Or feel free to check out our website: www.bankruptcy-advice.com.au/Sydney.com.au

Bankruptcy, Will I lose my Superannuation?

Bankruptcy in Australia can be complicated and difficult to understand. A question we commonly get asked here over at Bankruptcy Advice Sydney is 'what happens to my super if I apply for Bankruptcy'? The answer for most is straightforward, if your super is probably 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, think about 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 concerns Bankruptcy?

Remember Bankruptcy Advice Sydney is not suggesting this post is the complete story, if you have any questions feel free to consult with us on 1300 879 867. Whether or not you call us or someone else it doesn't matter, just please don't walk into bankruptcy blind when it comes to your SMSF in truth we encourage you seek 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 confronting 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 both of these members will need to also be the individual trustees. The duty of trustee sets a lot of legal rules, and if you are in this role I would highly encourage you to get knowledgeable about them all-- including the fact that you can not 'know or suspect' that one of you are bankrupt. So you can notice how an individual bankruptcy can be 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 after I'm bankrupt?

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

For starters, the SMSF will need to be restructured. This means that you will need to consider your entire structure and ensure that 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 frequently 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 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.

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

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 duty 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 choose to remain as a single member SMSF, or if they would like to roll everything into a managed fund. If both members are entering bankruptcy, then they would need to sell all assets at once 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 already facing this problem yourself, or with a partner in a SMSF, please seek financial advice to make certain you are meeting the ATO requirements.

A simple solution ...

As I recommended 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 headaches outlined above. Bankruptcy is never easy, but receiving proper advice is the best initial step. If you want to discuss your options further, contact us at Bankruptcy Advice Sydney or visit our website: www.bankruptcy-advice.com.au/Sydney.com.au or just call us on 1300 879 867.

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

When people in Sydney come to me seeking to speak about Bankruptcy, they are usually loaded with questions. The internet has lots of information, but far too much of it is baffling or contradicts itself, so I make it my mission to try and make things clearer. One of the very most standard troubles is 'Will I lose my business if I declare bankruptcy?' The concise answer is no. If you are an owner of a business any shape or size you can maintain your business if you want to. In Sydney, businesses that eventually become insolvent have a few options including liquidation, voluntary administration and so on. It's people who go bankrupt not companies.

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

A limitation that applies when you are actually bankrupt as a business owner is that you may be in your very own business as a sole trader only. Certainly there are things you will want to make known as a part of that but generally you can still run your company. For some business owners, bankruptcy affects their ability to run the business because of the licensing issues. As an 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 concerns licenses and Bankruptcy in Sydney.

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 rack up heaps of debt in your business, then go bankrupt then open the doors the next day like nothing had happened. There are laws in place to prevent what is called phoenix companies appearing out of the ashes of an old company.

Having said that, it's just an issue of talking to the right people about Bankruptcy. In this circumstance you may think 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 earn money from your liquidation - heaps of money - so what advice do you think you will get?

When it comes to Bankruptcy, I consider that giving generic advice in this area is likely damaging as it can have very substantial implications for directors and business owners. This is because it is just one of those cases where what the right guidance for one business owner is the inappropriate 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 continue to deal with your suppliers 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 worried 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, precisely where to turn and what questions to ask about Bankruptcy, then feel free to get in touch with Bankruptcy Advice Sydney on 1300 879 867, or visit our website:bankruptcy-advice.com.au/Sydney .

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

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

Involuntary bankruptcy occurs 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 normally 21 days to pay all the debt. If you don't, then the creditor goes back 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 documentation in then afterwards you are bankrupt.

You can object to a bankruptcy notice by going to court after the 21 days have expired and put your case forward, to stop it going to the next level. Apart from the way you became bankrupt there is in fact no distinction between Involuntary Bankruptcy and or Voluntary Bankruptcy - once you are declared bankrupt, they're overseen to in the exact 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 suggestions and act on that advice. Generally I've found it's always more effective to know what you can and can't do before you have someone else bankrupt you. Once you are bankrupt, it's normally far too late.

Voluntary Bankruptcy

On the other hand, when it comes to Bankruptcy, sometimes there are times 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 more often than not I find that one way you could work it out is to figure out just 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 rate 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 fail to remember 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 seriously damaged for that period of time - and all of this will impact how you need to approach Bankruptcy.

In many ways, the ease with which companies/credit providers can default your credit file is unjust. The punishment doesn't seem to match 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 rubbed out completely.

So if your credit rating is a big element in trying to decide whether to participate 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 variation 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 mentioned 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 discuss 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. As compared to countries like the United States, our bankruptcy laws are very reasonable.

I don't claim to know why that is but a couple of hundred years ago debtors went to prison. Nowadays I suppose the government feels 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 pay for a car accident if the car was not actually 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 readily available options. When getting some advice, always remember that there are always possibilities when it relates to Bankruptcy in Sydney, so do some research, and Good luck!

If you want to learn more about what to do, where to turn and what questions to ask about Bankruptcy, then feel free to talk to Bankruptcy Advice Sydney on 1300 879 867, or visit our website: bankruptcy-advice.com.au/Sydney .

Bankruptcy in Sydney - Will my income be altered if I go bankrupt?

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

The first thing you need to understand about this area of Bankruptcy is the amount 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 annually. A dependant is someone who lives with you and earns less than $3,124 per year (regardless of their age).

You can request a hardship variation that increases the threshold amount, if you have costs in Sydney such as medical, child care, significant travel to and from work, or a situation where your spouse used to work but is no longer able to add to the household income.

Some of the useful parts of Bankruptcy is that your employer will not be alerted when you file for bankruptcy. Also, Child support is always taken into consideration in bankruptcy, if you receive child support that is not factored in as income. If you pay child support this will be also thought about, for example if you give $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 many more issues surrounding income and what is or isn't regarded as income - if you're not exactly sure, it's a good idea to get professional advice. The reason you have to consider your income as a part of the Big 5 questions here is that bankruptcy is in some situations not an economically sensible option.

If one of your creditors is the ATO (for unpaid taxes), then your tax refund may be taken by the ATO while you are bankrupt to chip in toward your tax bill. If you don't have a tax bill then you will keep your tax refund provided that doesn't take you over your threshold income restrictions.

If you feel like when it comes to Bankruptcy, your issue is more complex, then please get specialist advice in Sydney. I may sound like a broken record, but remember that it's always a smart idea to work through these options before declaring bankruptcy, since once you have filed the paperwork it's too late to change your mind.

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

Bankruptcy in Sydney - Changes that help Small Business and Entrepreneurs

Do you have knowledge of just how much Bankruptcy in Sydney is changing? The Australian Government at the end of 2015 submitted some radical changes to the Bankruptcy Laws in Australia. Among the most significant of these is the length of time that a person is bankrupt for. At the moment, there is a minimum amount of time that you must remain bankrupt, but, 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 suggested 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 improvements to the issue of Bankruptcy will take 18 months to implement. Mr Carnegie, went on to say in the Financial Review that safeguarding family assets was essential because "banks just terrorise small business and the mental health consequences to society are enormous".

The problem is Australia's bankruptcy laws prevented investors from supporting start-ups, and as a result 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 debate around this Bankruptcy issue in Sydney that some make is that this change will only invite fraudulent behavior opening pandora's box in a manner of speaking for the unscrupulous to violation of the bankruptcy system. We have looked at the minimum, but on the other side of the matter, The government is not suggesting to change the maximum term of 8 years if it deems a bankrupt has appeared in an unethical or fraudulent way, and there are no recommendations to change the consequences of misrepresenting yourself or financial situation when filing for bankruptcy in Australia.

As a bankruptcy professional in Sydney, I have a reasonable share of practical experience when it comes to Bankruptcy. And having dealt with countless bankruptcy cases in Sydney I have never come across someone abusing the system or acting in an irresponsible way as to exploit the bankruptcy laws in Australia. When it comes to Bankruptcy, each week I help a small business owner or entrepreneur undergo the very challenging task of bankruptcy, not once have I felt they are happy about it. The standard small business owner or entrepreneur in Sydney does not start out taking enormous financial risks with the intention to fail. The media really loves citing the apparent wrongdoing that will be rampant if these changes occur, what a joke!

A Win for Small Business

These suggested changes will be good for often the most effective and brightest in Sydney not get tossed 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, employers keeping this country going.

There certainly is a fine line with the things the government is trying to do here, since they are attempting to balance helping individuals who have made decisions out of their control, and dissuading people from making blunders that land them in trouble and therefore an issue of Bankruptcy. However you also don't want to kill the experience and knowledge that business owners have. You surely don't want to smash people simply because they have had a genuine failure in a large or small start-up venture that has not worked out.

At the major 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 bankruptcy were minimized because directors are troubled they'll be personally accountable in an insolvency arrangement if the new endeavour doesn't work out.

The government's suggested 'safe haven' changes for directors of companies will enable Australia to more fully explore and innovate, which will make big changes for Bankruptcy. I cannot imagine, that these variations will be destructive to Australia's economy, in fact these bankruptcy laws will save the tax payer in all areas of health - Especially in the mental health industry because the emotional cost of bankruptcy is enormous. When it comes to Bankruptcy in Sydney not a day passes where I don't hear the tragic experiences of relationship failures, thoughts of suicide and the list goes on.

Bankruptcy helps save lives, and it could save yours. If you want some assistance with your debts in Sydney or are just considering Bankruptcy, don't hesitate to contact us here at Bankruptcy Advice Sydney on 1300 879 867, or visit our website: WWW.bankruptcy-advice.com.au/sydney.