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 in Sydney - Will I lose my house if I go bankrupt?

Bankruptcy Sydney is a complex process, but I know from meeting with thousands facing the prospect of bankruptcy over the years, that pretty much nothing concerns people more than the thought of losing the family home or apartment. Almost everybody is emotionally connected to their home - it's where the kids have grown, it's where you take pleasure in life on a day to day base.

Will you lose your house if you go bankrupt? The answer 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 benefit 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 Sydney house, you ask? It's easier if I explain the basic theory behind the Bankruptcy process as administered by the trustee, then you'll have a clearer image.

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

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 any assets that can contribute to repaying 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 in your home then it's pointless to sell your home. This is happening more and more since the GFC as house prices in many locations have been heading south so what you paid 4 years ago may not really reflect the price today.

A quick tip here if you have a house in Sydney and are looking at Bankruptcy: get a qualified professional to help you through this process, there are plenty of variables in these scenarios that should be considered.

You might wonder, why would the bank want bankrupt customers? wouldn't they need 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, provided 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 decides that there is a lot 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 mark the value of your house and the quantity you owe on the house. A tip if you are attempting to work out the value of your house: use a registered valuer as this will give you peace of mind, don't use your neighbours' gut feel recommendations or a real estate agents advice to arrive at this figure. When you get a valuer out to your house, make certain 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 the house in the next 30 days you may sway the result. The idea is that you want a sensible sell now figure.

There are two main reasons this valuation system is critical to you: one you will certainly have peace of mind ascertaining the market value of your house, then afterwards you can easily create your equity position. Second of all, your house may be worth even more than you thought. Get some advice before carrying this out. The amount of times I've met 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 significant 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 involves Bankruptcy, this is just one of potentially hundreds of scenarios that are likely when it comes down to the family home. Bear in mind the non-bankrupt party can buy the bankrupt's portion of the home in bankruptcy also. I should repeat this but get some information on this area of Bankruptcy because it is very tricky and each and every case is different.

If you need 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 Advice Sydney on 1300 879 867, or visit our website: www.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.