Losing your house: How much do you know about Going Bankrupt in Canberra?

The greatest concern a lot of people have when they come to our business about Going Bankrupt is simply ‘Can I manage to keep my house?’ and sometimes the answer is yes, you can keep your house.

The only reason you may be driven to sell your family home if you file for bankruptcy is because you have so much equity in the home that it is regarded as an asset. Please go over these basic hypothetical case studies below to get your head around Going Bankrupt and how it has an effect on houses in Australia. Remember If you need to know more regarding Going Bankrupt and houses feel free to contact us here at Bankruptcy Advice Canberra on 1300 879 867, or check out our website: http://www.bankruptcy-advice.com.au/Canberra.com.au

Case Study 1. (Mike & Sue Smith)

5 years ago Mike and Sue purchased a house in a mining town for $450,000. At this time the mining boom was helping keep all the property prices nice and high. Now they are needing to look at Going Bankrupt considering they have massive debts of $80,000 on top of their mortgage and credit card and tax debt.

They really wish to keep their house but wonder if they can, they know that house prices if anything have gone down in the area in the last 5 years so to be safe they think that their house is currently only worth $450,000 after all these years, to make sure they searched http://www.realestate.com.au/ sold section of the website to see what other houses in the streets nearby have sold for recently.

Having said that they have not paid any principal of the home loan over the last 5 years, mainly just interest, so they still owe $450,000.

• Current House Value = $450,000.
• Current Mortgage Value = $450,000.
• Net Equity Value = $0.

Because there is no equity in this particular property the trustee will not ask Mike and Sue to sell their house when they go bankrupt, as long as they keep up the mortgage payments then all will be well for them for the 3 years they are in bankruptcy.

At the end of the bankruptcy period the trustee will write to them and ask if they would like to take over ownership of their house again and so long as it has not increased in price over the 3 years they have been bankrupt they will be asked to make an offer to have their house back. This is typically somewhere between $3,000 and $5,000 to cover the legal costs of modifying the land title deed etc.

Now let’s look at a slightly different example of Going Bankrupt and houses.

Case Study 2. (Bill & Michelle Johnson)

2 years ago Bill and Michelle purchased a townhouse in a wonderful suburb of Canberra for $850,000 they tipped in $50,000 as a deposit and now the townhouse two years later is worth $900,000.

• Current House Value = $900,000.
• Current Mortgage Value = $800,000.
• Net Equity Value = $100,000.

As a result of a recent business downfall Bill is about $240,000 in debt. Michelle who works in banking has a separate job and no other debt except for the mortgage. Bill cannot pay his debts therefore he is looking into Going Bankrupt. Michelle is worried that she too may need to file for bankruptcy or be obliged into it due to the house loan.

Within this particular case the trustee is required to access or get their hands on Bill’s part of the equity which is $50,000 less selling costs. They can do this in a few ways; 1. Make them sell the home. 2. Invite Michelle to buy Bills half of the equity. 3. leave them in the home – but It’s very unlikely in this case that the trustee would be happy to leave Bill and Michelle in the house because there is just too much equity.

So Michelle may have the ability to purchase Bill’s share of the equity by coming up with $50,000 and buying out Bills’ half and from that moment its now 100 % Michelle’s house.

Property and Going Bankrupt in Australia is confusing and demanding, these two case studies above are just the tip of the iceberg as far as your options in Canberra are concerned. If you need to know more about Going Bankrupt and houses feel free to get in touch with us here at Bankruptcy Advice Canberra on 1300 879 867, or visit our website: http://www.bankruptcy-advice.com.au/Canberra.com.au.

Going Bankrupt Canberra, So what is the Deal with Debts?

What Debts are removed if I go Bankrupt?

The basic answer is that when it concerns Going Bankrupt most debts are wiped, and I have included a summary below for you to look at.

But, simply put some of the exceptions are Centrelink Debts, Child Support, Court fines (like speeding fines) and also any debts arising from uninsured Motor-vehicle claims and educational debts which include HECS or FEE-HELP. These debts are not eliminated 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 genuine security affixed 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 removed 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 has to be sold or returned. This is just one element that, when it comes to Going Bankrupt, it is vital to get professional advice – like that offered at Bankruptcy Advice Canberra.

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 eliminated with bankruptcy. If you have a business with any type of debts find some advice because it is not always so easy. Feel free to call us here over at Bankruptcy Advice Canberra if you have any questions on 1300 879 867. Or feel free to check out our website: http://www.bankruptcy-advice.com.au/Canberra.com.au

What about my business or Company debts?

In some cases when it involves Going Bankrupt we can assist you with your business debts, call us concerning 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. When it comes to Going Bankrupt, it can be a complicated area, so remember there are implications for a business owner such as insolvent trading. At Bankruptcy Advice Canberra we specialise in business and personal debts so give us a call here at Bankruptcy Advice Canberra if you have any questions about Going Bankrupt on 1300 879 867. Or feel free to visit our website: http://www.bankruptcy-advice.com.au/Canberra.com.au

Going Bankrupt, Will I lose my Superannuation?

Going Bankrupt Australia can be convoluted and confusing. A question we often get asked here over at Bankruptcy Advice Canberra is ‘what happens to my super if I apply for Bankruptcy’? The solution for most is straightforward, if your super is in a regulated fund or industry fund like Sunsuper or Host Plus then very little happens; your super is 100 % safe when it comes to Going Bankrupt.

 

What if I have a Self Managed Super Fund?

This is a growing concern, look at the increasing number of members of Self-Managed Super Funds (“SMSFs”) in the last few years; the ATO tells us it has increased Australia-wide from 758,589 in 2009 to 1,011,689 in 2014. So what happens to these Superfunds when it comes to Going Bankrupt?

Remember Bankruptcy Advice Canberra isa not implying this post is the complete story, if you have any questions feel free to contact us on 1300 879 867. Whether or not you call us or another person it doesn’t matter, just please don’t walk into bankruptcy blind when it comes to your SMSF actually we highly recommend you find 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 considering Going Bankrupt, you can not be a part of a SMSF. Why? Because if you are dealing with bankruptcy, you will be grouped as a ‘disqualified person’. And a disqualified individual cannot operate as an Individual Trustee. This poses a problem due to the fact that usually most of the SMSFs are just 2 people, which means both of these members will need to also be the individual trustees. The duty of trustee poses a lot of legal rules, and if you are in this role I would highly urge you to become aware of 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 rather detrimental to a SMSF and as you can assume the process of Going Bankrupt 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 have to be reorganized. This means that you will want to consider your overall structure and make sure it is meeting the basic conditions, including having a new trustee that is not encountering issues with Bankruptcy. The Australian Tax office will offer 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 reorganizing 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 means you ought to let them know that you have a bankruptcy concern 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.

Through 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 Canberra 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 have 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 need 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 intend to roll it all into a managed fund. If both members are entering bankruptcy, then they will need to sell all assets promptly and transfer the liquid assets to the managed fund.

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

A simple solution …

As I recommended earlier, a basic solution to your SMSF problem is to put your super back into a normal regulated managed fund prior to bankruptcy and save yourself all the headaches outlined above. Going Bankrupt is never easy, but receiving proper advice is the best 1st step. If you want to discuss your possibilities further, give us a call at Bankruptcy Advice Canberra or visit our website: http://www.bankruptcy-advice.com.au/Canberra.com.au or just call us on 1300 879 867.

Going Bankrupt in Canberra – Will I lose my home if I go bankrupt?

Going Bankrupt Canberra is a confusing process, but I know from meeting with thousands facing the possibility of bankruptcy over the years, that nothing troubles people more than the idea 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 enjoy 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 Going Bankrupt, and therefore push themselves to the brink of insanity to not lose the family home. But when it comes to the whole process of Going Bankrupt, 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 Canberra house, you ask? It’s easier if I explain the basic guideline behind the Going Bankrupt process as administered by the trustee, then you’ll have a more clear image.

The function of the bankruptcy trustee is to firstly agree to the regulation of the bankruptcy act 1966 (it’s a very plain read about 600 pages if you are wondering).

Within that regulatory framework, the trustee is to help recover monies owed to your creditors, that is executed in a bunch of distinct ways but it mainly comes down to income and assets. The trustees role is to collect payments over your income threshold. The further role is to sell any assets that can contribute to fixing your debts.

What this resembles is that yes the trustee will sell your house right? Not normally. The only reason the trustee will sell off 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 more and more since the GFC as house prices in many regions have been heading south so what you paid 4 years ago may not automatically reflect the price today.

A quick tip here if you have a house in Canberra and are looking at Going Bankrupt: get a professional to help you through this process, there are loads of variables in these scenarios that need to be considered.

You might wonder, why would the bank want bankrupt customers? wouldn’t they hope to sell your house and not take the risk? The bank that has kindly lent you the money for your house is creating good money every month in interest out of you, month in month out, so long as you keep up to date with your payments then the bank wants you in there at all costs. Ultimately however it’s not the bank’s call if the trustee figures out 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 list the value of your house and the quantity 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 offer 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, see to it you tell the valuer to value the property for a quick sale, see to it 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. Nowadays 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 control the result. The idea is that you want a realistic sell now figure.

There are two main reasons this valuation technique is critical to you: one you will have peace of mind ascertaining the market value of your house, and after that you can easily set up your equity position. Secondly, your house may be worth so much more than you thought. Get some assistance before doing this. The amount of times I’ve seen clients that have sold their family home of 20 years simply to learn I could of helped them keep it; unfortunately this happens all too often

When it comes to Going Bankrupt and houses, another significant consideration is ownership, often houses are bought 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 does not, the equity is only factored on the 50 % of the property.

When it comes down to Going Bankrupt, this is just one of possibly numerous scenarios that are likely when it comes down to the family home. Bear in mind the non-bankrupt party can buy the bankrupt’s part of the house in bankruptcy also. I have to repeat this but get some advice on this area of Going Bankrupt because it is very tricky and every case is different.

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

Going Bankrupt in Canberra – Who do I speak to?

Should I consult with my accountant about Going Bankrupt?

The answer seems obvious doesn’t it: if anybody knows your financial circumstance well in Canberra, It’s going to be your accountant. However, the short answer is a definite No! It’s not that your accountant doesn’t have your best interests at heart when it comes to Going Bankrupt, it’s that his expertise lie in helping you save you money at tax time, minimising your tax liability and lodging your BAS.

Most accounting degrees will spend very little to no time on bankruptcy, it’s generally done as a post graduate speciality course for those who wish to work in the field. Unless your accountant is an insolvency expert, he will not know that a lot about the implications of Going Bankrupt, 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 Canberra, they often tend to be large firms with very nice office spaces who charge accordingly.

Should I consult my Solicitor about Going Bankrupt?

No! You can speak with your solicitor in Canberra but more than likely it won’t do you much good. Solicitors are definitely good at doing 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 concerns Going Bankrupt, the specialists in Canberra have the tendency to have either a legal or accounting qualifications, and the main reason for that is simply that you can’t start in the post graduate study to become a qualified insolvency practitioner except if 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 choose one you will pay an ample price for their expertise.

Should I talk to a financial counsellor about Going Bankrupt?

Yes! There are plenty of financial counselling services that can help you with this, they have no hidden agendas and they’re a fantastic option for letting you analyze your situation when it comes to Going Bankrupt. If you end up freaking out constantly, not sleeping, not eating or over-eating and thinking of money pressures regularly, then get some help.

There are also charities around Canberra like Lifeline that offer a terrific service. They will be a sounding board if you just need somebody to talk about with you what your possibilities are. Don’t let your financial problem destroy your life – ultimately it’s just money.

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

Going Bankrupt in Canberra – Am I going to lose my job if I go bankrupt?

Pretty much everyone confronting Going Bankrupt Canberra has this concern about their job, and the response to the question is ‘maybe’. The problem with some occupations isn’t that you cannot do the job any longer, it’s more an issue of professional bodies or associations that view bankruptcy in a dim light and can keep it tough for you.

When it comes to Going Bankrupt and employment in Canberra, what I would suggest is that you do your own preparation here, do the research and go through that process first before declaring bankruptcy because that may help you make a decision. Check if your job is on the list below. If it is, I ‘d consult with them directly and explain your situation. Some groups won’t have a problem with your bankruptcy provided that it wasn’t accompanied by shady or questionable behaviour.

If you are affected by this part of Going Bankrupt and licences, In many cases you won’t lose your Licence permanently; it just gets suspended for the 3 years of your bankruptcy. If your profession happens to be on the checklist and you’ve spoken to them but they won’t budge, then I ‘d suggest you seek some professional advice. This may be one of those rare occasions when I ‘d suggest using a Debt Agreement or a Personal Insolvency Agreement.

Remember most of the time you don’t need to exit the industry you are employed in; you just need to work under someone else’s Licence for a time. In the building sector this is particularly relevant: if you’re an electrician for example, there is very little stopping you working for another electrician in Canberra under their Licence.

Please check out the table below, it handles the license and company side of Going Bankrupt. Its organised on a state by state basis, and you’ll realize that there’s a listing called “Operating a business.” Please don’t worry if you run your own company. Among the limitations of bankruptcy is you can’t be a director of a business, but all that this actually means is that you have to restructure your business.

Just for your peace of mind I’ll tell you now that you can still own and run the business as a sole trader. There are no restrictions: you can recruit staff and turn over any amount of money. Typically people who run their own business have debts that are business related and it can become very complicated, so it’s best to obtain some qualified advice rather than going it alone.

If you would like to learn more about what to do, where to turn and what questions to ask about Going Bankrupt, then feel free to get in touch with Bankruptcy Advice Canberra on 1300 879 867, or visit our website: http://www.bankruptcy-advice.com.au/Canberra .

Going Bankrupt in Canberra – Will I lose my business if I go bankrupt?

When people in Canberra come to me trying to discuss Going Bankrupt, they are constantly filled with questions. The internet has plenty of information, but far too much of it is confusing or contradicts itself, so I make it my mission to try and make it clearer. One of the most universal worries 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 Canberra, businesses that eventually are insolvent have a few options like liquidation, voluntary administration and so on. It’s people who go bankrupt not businesses.

Going Bankrupt is a complicated area so get some qualified advice on this one if you have a business. Generally speaking, the financial obligations in a business and personal debts go hand in hand when a business owner goes bankrupt. There are some significant implications for directors of companies when it pertains to Going Bankrupt in Canberra: 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 limitation that applies when you are bankrupt as a business owner is that you may be in your own business as a sole trader only. Certainly there are things you need to reveal as an aspect of that but essentially you can still run your company. 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 best questions when it involves licenses and Going Bankrupt in Canberra.

But if your business is not impacted directly by such issues, then you’ll will need to restructure the way you run your business. There are considerations when and if you go bankrupt as a business owner: you can not acquire heaps of debt in your business, then go bankrupt then open the doors the next day like not a single thing had happened. There are laws in place to stop what is called phoenix companies growing out of the ashes of an old company.

Having said that, it’s just a point of talking with the suitable people about Going Bankrupt. In this circumstance you may think you need a liquidator for your company, and you could be right, but keep in mind that every liquidator is different and have their own motives. Liquidators make money from your liquidation – heaps of money – so exactly what advice do you believe you will get?

When it comes to Going Bankrupt, I believe that giving generic advice in this area is possibly risky as it can have very considerable implications for directors and business owners. This is since 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 basics however, that you may benefit from. There is no limitation to the size of the business you run even though you are bankrupt. You can employ staff. You can continue to deal with your distributors under certain conditions, the main one being you will need to meet the payment terms agreed upon.

So when it concerns Going Bankrupt, don’t get overly upset about what you can and can’t do as a business owner, just get the appropriate advice … If you would like to learn more about what to do, where to turn and what questions to ask about Going Bankrupt, then feel free to speak with Bankruptcy Advice Canberra on 1300 879 867, or visit our website: .bankruptcy-advice.com.au/Canberra .

Going Bankrupt in Canberra – does it matter if it is voluntary?

When it comes to Going Bankrupt Canberra, often people aren’t aware that there may be both voluntary, and involuntary bankruptcy – both of these have different methods and guidelines.

Involuntary bankruptcy arises when someone you owe money to applies to the court to declare you bankrupt. Generally when you get one of these particular notices, you have 21 days to pay all the debt. If you don’t, then the creditor goes back to the court and asks the court to provide a sequestration order that declares you bankrupt. A trustee is appointed, and then you have 14 days to get the paperwork in and after that you are bankrupt.

You can contest a bankruptcy notice by going to court immediately 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 difference between Involuntary Bankruptcy and or Voluntary Bankruptcy – once you are declared bankrupt, they’re conducted to in the very same way.

However, when it concerns Going Bankrupt for this, the stress, torment and fear that accompanies this method is incredible. If you think you are in all likelihood to be made bankrupt by someone, get some tips and act on that advice. Generally I’ve found it’s always far better to know what you can and can’t do before you have an individual bankrupt you. Once you are bankrupt, it’s normally far too late.

Voluntary Bankruptcy

Alternatively, when it comes to Going Bankrupt, sometimes there are moments that it is the best option. So you may want to ask yourself, ‘when should I consider voluntary Bankruptcy?’.

This question is not the same for everybody of course, but normally I find that one way you could work it out is to figure out just how long it will take you to pay each one of your debts – if its longer than 3 years (the period you are declared bankrupt), then this may assist you make that decision, and help you to understand Going Bankrupt.

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 forget to pay your $30 phone bill for 6 months more, it’s very likely the telephone company will default your credit file. That default will remain 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 have to approach Going Bankrupt.

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

So if your credit rating is a big aspect 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 difference 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 element most people are afraid of when they come to me to discuss their financial situation and Going Bankrupt. 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 quite 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 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 all of 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 insured.

There is far more that can be said about this and Going Bankrupt 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 options when it relates to Going Bankrupt in Canberra, so do some study, and Good luck!

If you would like to learn more about exactly what to do, where to turn and what questions to ask about Going Bankrupt, then don’t hesitate to get in touch with Bankruptcy Advice Canberra on 1300 879 867, or visit our website:bankruptcy-advice.com.au/Canberra .

Bankruptcy Advice in Canberra – Will my income be altered if I go bankrupt?

Bankruptcy Advice Canberra is a complicated process, and you should make 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 need to know about going bankrupt is there is no constraint 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 Advice.

The first thing you need to know about this area of Bankruptcy Advice 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 quantity 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 make an application for a hardship variation that increases the threshold amount, if you have financial strains in Canberra such as medical, child care, substantial travel to and from your job, or a situation where your spouse used to work but is not able to add to the family income.

Some of the intriguing parts of Bankruptcy Advice 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 thought about, for example if you pay $5,000 child support each year and you have no dependents living with you then your modified net income limit will be $55,332.10.

There are more issues involving income and what is or isn’t regarded as income – if you’re uncertain, it’s best to get experienced advice. The reason you must 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 be taken by the ATO while you are bankrupt to contribute 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 caps.

If you think when it comes to Bankruptcy Advice, your situation is more intricate, then just get professional advice in Canberra. I may seem 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 far too late to change your mind.

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

Going Bankrupt in Canberra – Choices, Choice, Choices

When it comes to Going Bankrupt in Canberra, there are a number of options that we get given depending on who we are, who we speak to, and exactly what has happened. Among the most common confusion I see with Going Bankrupt is when it comes to choosing between Debt Consolidation, Personal Insolvency Agreements, and Bankruptcy itself.

Should I consolidate my debts?

When it comes to Going Bankrupt in Canberra, much of the info you receive on this subject matter will reflect the interests of the advice giver. Therefore, if you call a debt consolidation firm, I can guarantee you they will tell you to consolidate your debts. The debt consolidation industry is a multi-billion dollar industry making money in one very straightforward way: charging you a fee for assisting you wrap all of your credit card and personal loans into one neat and tidy package.

I hate to tell you this but they aren’t going to be doing it for free. Please don’t misunderstand me: if you feel your financial troubles in Canberra could be fixed by paying less interest, then go on and check out the choices. Even a small amount of interest saved over years easily adds up.

Generally I find if you read this blog you’ve undoubtedly attempted to consolidate your debts already and come to the following realisations similar to these:

• Your credit rating is not good, and your credit file definitely has defaults on it so no one will give you a loan, consolidated or otherwise,.
• By the time you work it all out, you’re so far down a hole that saving on a tiny bit of interest just won’t make a lot of difference.
• You’ve likely gotten to the point where you’ve had enough, you’re emotionally drained, you can’t go on one more day ignoring blocked calls on your phone, ignoring the demands in the mail and so forth.

Personal Insolvency Agreements

So when it relates to Going Bankrupt in Canberra, what’s the huge difference between a Debt Agreement and a Personal Insolvency Agreement?

Overall flexibility is the main thing Personal Insolvency Agreements (PIA) have in their favour. They’re also administered by a registered and – might I add – regulated trustee including the government trustee ITSA, and not a private business that advertises on TV. Ultimately this process is similar to Debt Agreements (DA): The trustee has a meeting with the people you owe money to and they arrange a deal in your place. You can give a lump sum settlement figure or take part in a payment plan, or maybe you can offer them assets instead of cash. This may sound fine when it comes to the issues with Going Bankrupt – that is up until you realize that one of the problems with PIA’s is that 75 % of the people you owe money to have to come to an understanding the deal. If they do not, your proposal is rejected or must be renegotiated.

Generally people you owe money prefer all their money back plus interest. Sometimes they’ll go for less than the amount you owe them – it’s generally a percentage of the debt – but let me stress this part: because of all the variables involved in the negotiation process to put together a PIA its difficult to put a figure on what the people you owe money to will actually settle for.

In many cases you’ll have to pay back 100 % of the debt owed. This is not just because your creditors are greedy or have a mean streak, it’s because the administrators take 20 % of whatever is decideded upon with the people you owe money to. That applies whether you use a private company for this process or ITSA, the government body setup to administer to these PIAs.

When it comes to Going Bankrupt and insolvency I’ve come across creditors going for less 80 % on rare occasions, but that usually only occurs with a public company entering into receivership owing huge sums of money (the kind that makes the news). If you are were owed $10million and you know the people who owe you the money have a team of brilliant lawyers and some very clever structures in place and they offer 5 % of the debt, you might take it and be grateful. Sadly, ordinary punters like you and me in Canberra aren’t going to get that lucky!

If you wish to find out more about what to do, where to turn and what questions to ask about Going Bankrupt, then feel free to contact Bankruptcy Advice Canberra on 1300 879 867, or visit our website: bankruptcy-advice.com.au/Canberra .