Losing your house: Just how much do you know about Bankruptcy in Darwin?

The most important question people have when they come to our team regarding Bankruptcy is certainly 'Can I keep my house?' and in some cases the answer is yes, you can keep your house.

The only reason you are going to be driven to sell your family home if you declare bankruptcy is actually due to the fact that you have a lot of equity in the house that it is regarded as an asset. Please read these simple hypothetical case studies below to get your head around Bankruptcy and how it has an effect on houses in Australia. Remember If you have to know more about Bankruptcy and houses feel free to call us here at Fresh Start Solutions Darwin on 1300 818 575, or visit our website: www.freshstartsolutions.com.au/bankruptcy-Darwin.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 keeping all the property prices nice and high. Now they are needing to look at Bankruptcy given that they have huge debts of $80,000 on top of their mortgage and credit card and tax debt.

They really want 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 home is currently only worth $450,000 after all these years, to be sure they searched www.realestate.com.au/ sold section of the website to see what other houses in the streets close by have sold for recently.

Unfortunately 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 these people for the 3 years they are in bankruptcy.

At the end of the bankruptcy period of time the trustee will write to them and ask if they would like to take over ownership of their house again and provided that it has not grown 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 usually somewhere between $3,000 and $5,000 to cover the legal costs of changing the land title deed etc.

Now let's take a look at a slightly different example of Bankruptcy and houses.

Case Study 2. (Bill & Michelle Johnson).

2 years ago Bill and Michelle purchased a townhouse in a lovely suburb of Darwin 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.

Due to a recent business failing Bill is about $240,000 in debt. Michelle who does work in banking has a separate job and no other debt apart from the mortgage. Bill cannot pay his debts therefore he is looking into Bankruptcy. Michelle is bothered that she too may need to file for bankruptcy or be driven into it as a result of the house loan.

Within this particular case the trustee is required to access or get their hands on Bill's half 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 particular 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 chance 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 Bankruptcy in Australia is challenging and complicated, these two case studies above are just the tip of the iceberg as far as your options in Darwin are concerned. If you need to know more about Bankruptcy and houses feel free to consult with us here at Fresh Start Solutions Darwin on 1300 818 575, or visit our website: www.freshstartsolutions.com.au/bankruptcy-Darwin.com.au.

Losing your house: How much do you know of Bankruptcy in Hobart?

The most significant concern a lot of people have when they come to our company about Bankruptcy is normally 'Can I keep my house?' and in some cases the answer is yes, you can keep your house.

The only reason you will likely be obliged to sell your family home when you declare bankruptcy is actually because you have a lot of equity in the house that it is considered an asset. Please read through these basic hypothetical case studies below to get your head around Bankruptcy and how it affects houses in Australia. Remember If you want to know more regarding Bankruptcy and houses feel free to contact us here at Fresh Start Solutions Hobart on 1300 818 575, or check out our website: www.freshstartsolutions.com.au/bankruptcy-Hobart.com.au

Case Study 1. (Mike & Sue Smith).

5 years ago Mike and Sue bought 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 Bankruptcy since they have huge 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 still only worth $450,000 after all these years, to make sure they searched www.realestate.com.au/ sold section of the website to see what other houses in the streets close by have sold for lately.

However 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 home when they go bankrupt, as long as they keep up the mortgage payments then all will be well for these people for the 3 years they are in bankruptcy.

At the end of the bankruptcy period of time the trustee will write to them and ask if they would like to take over ownership of their house again and as 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 normally somewhere between $3,000 and $5,000 to cover the legal costs of altering the land title deed etc.

Now let's look at a slightly different example of Bankruptcy and houses.

Case Study 2. (Bill & Michelle Johnson).

2 years ago Bill and Michelle purchased a townhouse in a lovely suburb of Hobart 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.

Due to a recent business problem Bill is about $240,000 in debt. Michelle who does work in banking has a separate job and no other debt other than the mortgage. Bill cannot pay his debts therefore he is looking at Bankruptcy. Michelle is bothered that she too may need to declare bankruptcy or be forced into it because of 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 may do this in a few ways; 1. Have them sell the home. 2. Invite Michelle to buy Bills half of the equity. 3. leave them in the home - but It's very improbable 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 be able 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 Bankruptcy in Australia is confusing and complicated, these two case studies above are just the tip of the iceberg as far as your options in Hobart are concerned. If you need to know more about Bankruptcy and houses feel free to get in touch with us here at Fresh Start Solutions Hobart on 1300 818 575, or head to our website: www.freshstartsolutions.com.au/bankruptcy-Hobart.com.au.

Bankruptcy Hobart, What is the Deal with Debts?

Precisely what Debts are cleared away if I go Bankrupt?

The straightforward answer is that when it involves Bankruptcy most debts are wiped, and I have provided a compendium below for you to look at.

But, put simply 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 for instance, HECS or FEE-HELP. These debts are not removed when you file for bankruptcy.

What about Secured Debts?

A secured debt is a vehicle loan or a home loan; it is a debt that has some genuine security linked to it. So for example 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 eliminated if I file for bankruptcy?

Yes. If you have a car loan for $40,000 you can have that debt removed if you simply return 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 could be wiped but the asset will need to be sold or returned. This is just one aspect that, when it comes to Bankruptcy, it is important to get professional assistance - like that readily available at Fresh Start Solutions Hobart.

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 wiped out with bankruptcy. If you have a business with any form of debts get some advice because it is not always so straightforward. Feel free to call us right here at Fresh Start Solutions Hobart if you have any questions on 1300 818 575. Or feel free to check out our website: www.freshstartsolutions.com.au/bankruptcy-Hobart.com.au

What about my business or Company debts?

Sometimes when it comes to Bankruptcy we can really help you with your business debts, call us concerning this first. Remember bankruptcy applies to an individual not companies, trusts or businesses. 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 Fresh Start Solutions Hobart we specialise in business and personal debts so give us a call here at Fresh Start Solutions Hobart if you have any questions about Bankruptcy on 1300 818 575. Or feel free to visit our website: www.freshstartsolutions.com.au/bankruptcy-Hobart.com.au

Bankruptcy Hobart, What is the Deal with Debts?

Precisely what Debts are cleared away if I go Bankrupt?

The straightforward answer is that when it involves Bankruptcy most debts are wiped, and I have provided a compendium below for you to look at.

But, put simply 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 for instance, HECS or FEE-HELP. These debts are not removed when you file for bankruptcy.

What about Secured Debts?

A secured debt is a vehicle loan or a home loan; it is a debt that has some genuine security linked to it. So for example 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 eliminated if I file for bankruptcy?

Yes. If you have a car loan for $40,000 you can have that debt removed if you simply return 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 could be wiped but the asset will need to be sold or returned. This is just one aspect that, when it comes to Bankruptcy, it is important to get professional assistance - like that readily available at Fresh Start Solutions Hobart.

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 wiped out with bankruptcy. If you have a business with any form of debts get some advice because it is not always so straightforward. Feel free to call us right here at Fresh Start Solutions Hobart if you have any questions on 1300 818 575. Or feel free to check out our website: www.freshstartsolutions.com.au/bankruptcy-Hobart.com.au

What about my business or Company debts?

Sometimes when it comes to Bankruptcy we can really help you with your business debts, call us concerning this first. Remember bankruptcy applies to an individual not companies, trusts or businesses. 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 Fresh Start Solutions Hobart we specialise in business and personal debts so give us a call here at Fresh Start Solutions Hobart if you have any questions about Bankruptcy on 1300 818 575. Or feel free to visit our website: www.freshstartsolutions.com.au/bankruptcy-Hobart.com.au

Bankruptcy, Will I lose my Superannuation?

Bankruptcy in Australia can be convoluted and confusing. A question we commonly get asked here at Fresh Start Solutions Hobart is 'what happens to my super if I apply for Bankruptcy'? The solution for most is easy, if your super is normally in a regulated fund or industry fund like Sunsuper or Host Plus then 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, look into the expanding number of members of Self-Managed Super Funds ("SMSFs") in recent 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 concerns Bankruptcy?

Remember Fresh Start Solutions Hobart is not proposing this post is the entire story, if you have any questions feel free to consult with us on 1300 818 575. Regardless if you call us or another person it does not matter, just please don't walk into bankruptcy blind when it comes to your SMSF in truth we encourage you ask for 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 thinking about Bankruptcy, you can not be a part of a SMSF. Why? Because if you are going up against bankruptcy, you will be labeled as a 'disqualified person'. And a disqualified person cannot operate as an Individual Trustee. This poses a problem due to the fact that usually most of the SMSFs are just 2 people, which means both of these members must also be the individual trustees. The position of trustee presents a lot of legal rules, and if you are in this role I would highly urge you to be familiar with 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 quite detrimental 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 comes to pass if one of the members of an SMSF does enter Bankruptcy?

For starters, the SMSF will have to be restructured. This means that you will need to consider your over-all structure and ensure that it is meeting the basic conditions, including things like having a new trustee that is not suffering from issues with Bankruptcy. The Australian Tax office will provide you a 6 month 'grace period' to get this done before you face penalties. And keep in mind, sometimes the most suitable plan would be to simply roll the fund into an industry or corporate fund.

Beyond these large scale restructuring issues, there is a lot of paperwork to deal with too, and you need to be constantly keeping the ATO informed of what is happening. This suggests you will need to let them know that you have a bankruptcy problem 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 must also notify ASIC of their resignation.

Over that 6 month period you will need to remove the Bankrupt from the SMSF-- including their property and assets. Remember if you are not sure call Fresh Start Solutions Hobart for some free advice on 1300 818 575.

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 end up being their responsibility to oversee the sale and relocation 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 remove 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 intend to roll all of it into a managed fund. If both members are entering bankruptcy, then they will need to sell all assets as soon as possible and move the liquid assets to the managed fund.

From that you can notice how when it comes to Bankruptcy, even when one single member is dealing with issues, it can affect the very existence of an SMSF. If you are right now facing this issue 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 problem 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 finding proper advice is the best first step. If you want to discuss your options further, give us a call at Fresh Start Solutions Hobart or visit our website: www.freshstartsolutions.com.au/bankruptcy-Hobart.com.au or just call us on 1300 818 575.

Bankruptcy in Hobart - Will I lose my home if I go bankrupt?

Bankruptcy Hobart is a challenging process, but I know from meeting with thousands facing the possibility of bankruptcy over the years, that pretty much nothing troubles people more than the thought of losing the family home or apartment. Almost everybody is psychologically connected to their home - it's where the children have grown up, it's where you appreciate 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 as a result 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 perk 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 Hobart house, you ask? It's easier if I explain the basic principle 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 dull read about 600 pages if you are curious).

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

What this sounds like 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 repay your debts. If there is no equity in your home then it's pointless to sell your home. This is happening much more since the GFC as house prices in many regions have been heading south so what you paid 4 years ago may not actually reflect the price today.

A quick word of advice here if you have a house in Hobart and are looking at Bankruptcy: get an expert to help you through this process, there are a number of variables in these scenarios that have 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 making good money every month in interest out of you, month in month out, provided you keep up to date with your monthly payments then the bank really wants you in there at all costs. Ultimately however it's not the bank's call if the trustee establishes that there is plenty of equity in your house the trustee will force you and the bank to sell the house.

When you file for bankruptcy you are asked to note the value of your house and the amount of money 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 provide you peace of mind, don't use your neighbours' gut feel advice or a real estate agents advice to come to this figure. When you get a valuer out to your home, ensure that you tell the valuer to value the property for a quick sale, make certain you mow the lawn and don't leave the kitchen in a mess also.

Valuers used to offer two valuations: one for a quick sale and one for a well marketed non time delicate sale. These days that's not the case, but if you meet them and tell them you need to sell your home in the next 30 days you may control the result. The idea is that you want a sensible 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, and afterwards you can easily create your equity position. Secondly, your home may be worth far more than you thought. Get some suggestions before doing this. The number of times I've met 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 Bankruptcy and houses, another main consideration is ownership, often houses are acquired in joint names. To puts it simply 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 relates to Bankruptcy, this is just one of likely 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 property in bankruptcy also. I have to repeat this but get some guidance on this area of Bankruptcy because it is very tricky and every 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 call Fresh Start Solutions Hobart on 1300 818 575, or visit our website: www.freshstartsolutions.com.au/bankruptcy-Hobart

Bankruptcy in Hobart - Who do I talk to?

Should I consult with my accountant about Bankruptcy?

The answer seems obvious doesn't it: if anyone knows your financial situation well in Hobart, It's going to be your accountant. However, the short answer is a definite No! It's not that your accountant will not have your best interests in mind when it comes to Bankruptcy, it's that his experience lie in helping you save you money at tax time, reducing your tax liability and lodging your BAS.

Most accounting degrees will put in very little to no time on insolvency, it's generally performed as a post graduate specialty program for those who want to work in the field. Unless your accountant is an insolvency specialist, he won't know that a lot about the implications of Bankruptcy, I can assure you insolvency specialists know much about tax returns or BAS in. If you do happen to find an insolvency accounting firm in Hobart, they tend to be large firms with very nice office spaces who charge accordingly.

Should I consult with my Solicitor about Bankruptcy?

No! You can speak with your solicitor in Hobart but more than likely it won't do you much good. Solicitors are certainly good at carrying out things lawyers do, like assisting you do your Will and buying your house and keeping you out of court if you're lucky. When it relates to Bankruptcy, the specialists in Hobart will have either a legal or accounting qualifications, and the reason for that is simply that you can't enrol in the post graduate study to become a qualified insolvency practitioner unless you have a law or accounting degree.

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

Should I talk to a financial counsellor about Bankruptcy?

Yes! There are lots of financial counselling services to aid 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 out constantly, not sleeping, not eating or over-eating and thinking about money pressures constantly, then get some help.

There are also charitable organizations around Hobart 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 problem destroy your life - in the end it's just money.

If you would like to learn more about what to do, where to turn and what issues to ask about Bankruptcy, then feel free to get in touch with Fresh Start Solutions Hobart on 1300 818 575, or visit our website: www.freshstartsolutions.com.au/bankruptcy-Hobart

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

When people in Hobart come to me looking to talk about Bankruptcy, they are always packed 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 clearer. One of the most simple problems 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 keep your business if you want to. In Hobart, businesses that eventually become insolvent have a few options like liquidation, voluntary administration and so on. It's individuals who go bankrupt not companies.

Bankruptcy is a complex area so get some qualified 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 declares bankruptcy. There are a few crucial implications for directors of companies when it pertains to Bankruptcy in Hobart: A bankrupt can not be a director of a company, so if you have a pty ltd company you will need to resign as a director soon after you're bankrupt.

A restriction 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 should reveal as an aspect of that but basically you can still run your company. For some business owners, bankruptcy impacts their ability to run the business because of the licensing issues. For instance, if you run a building company, your license will be suspended once you're bankrupt and consequently you can not trade without that license, so make sure you are asking the ideal questions when it comes to licenses and Bankruptcy in Hobart.

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 acquire heaps of debt in your company, then go bankrupt and afterwards open the doors the next day like almost nothing had happened. There are laws in place to stop what is called phoenix companies appearing out of the ashes of an old company.

Having said that, it's just an issue of talking with the right people about Bankruptcy. Here in this circumstance you may believe you need a liquidator for your company, and you might be right, but bear in mind that every liquidator is unique 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 possibly dangerous as it can have very serious implications for directors and business owners. This is due to the fact that it is 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 providers 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 stressed about what you can and can't do as a business owner, just get the appropriate advice ... If you wish to learn more about what to do, exactly where to turn and what questions to ask about Bankruptcy, then feel free to call Fresh Start Solutions Hobart on 1300 818 575, or visit our website: www.freshstartsolutions.com.au/bankruptcy-Hobart

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

When it comes to Bankruptcy Hobart, typically people aren't aware that there can be both voluntary, and involuntary bankruptcy - each have unique methods and policies.

Involuntary bankruptcy happens when somebody you owe money to involves the court to declare you bankrupt. Generally when you get one of those notices, you have actually 21 days to pay all the debt. If you don't, then the creditor goes back to the court and asks the court to issue a sequestration order that declares you bankrupt. A trustee is assigned, and then you have 14 days to get the paperwork in and then you are bankrupt.

You can challenge a bankruptcy notice by going to court shortly after the 21 days have expired and put your case forward, to stop it going to the next level. Other than the way you became bankrupt there is in reality no difference between Involuntary Bankruptcy and or Voluntary Bankruptcy - once you are declared bankrupt, they're managed to in the exact same way.

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

Voluntary Bankruptcy

However, when it comes to Bankruptcy, sometimes there are moments that it is the most effective 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 basically I find that one way you could work it out is to figure out how long it will take you to pay every one of your debts - if its longer than 3 years (the period you are declared bankrupt), then this may serve to help 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 rate she was paying her account, and it was 35 years! Imagine 35 years for one credit card bill.

Credit rating damage can help you think this through. If you move house and overlook to pay your $30 phone bill for 6 months more, it's very likely the phone company will default your credit file. That default will sit on your file for 5 years, so for $30 you can have your credit file seriously damaged for that period of time - and all of this will affect how you have to approach Bankruptcy.

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

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

Bankruptcy

I have stated the word a few times now, but when it comes down to it, Bankruptcy is the biggest part, and the part most 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 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 with countries like the United States, our bankruptcy laws are really generous.

I don't pretend to know why that is but a few hundred years ago debtors went to prison. Nowadays I suppose the government assumes the sooner it can get you back on your feet working and paying tax, the better. It makes more sense than locking you up which in turn 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 far more that can be said about doing this and Bankruptcy in general but the purpose of this blog was to help you decide between a few readily available options. When getting some advice, always remember that there are always alternatives when it comes to Bankruptcy in Hobart, so do some groundwork, and Good luck!

If you want to find out more about just what to do, where to turn and what questions to ask about Bankruptcy, then feel free to get in touch with Fresh Start Solutions Hobart on 1300 818 575, or visit our website: freshstartsolutions.com.au/bankruptcy-Hobart

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

Bankruptcy Hobart is a confusing process, and you should ensure you get the right recommendations. 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 restriction on how much you can earn. However, I will point out that your income is a significant consideration when working through when it comes to Bankruptcy.

The very 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 amount of money 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 apply for a hardship variation that increases the threshold amount, if you have financial commitments in Hobart like medical, child care, significant travel to and from work, or a situation where your partner used to work but is not able to contribute to the family income.

Some of the insightful parts of Bankruptcy is that your employer will not be notified when you file for bankruptcy. Also, Child support is always looked at in bankruptcy, if you receive child support that is not factored in as income. If you pay child support this will be also 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 much more issues encompassing income and what is or isn't thought of as income - if you're not sure, it's ideal to get qualified advice. The reason you need 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 will likely 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 just as long as that doesn't take you over your threshold income caps.

If you think when it comes to Bankruptcy, your situation is more intricate, then simply get experienced advice in Hobart. I may seem like a broken record, but bear in mind that it's always a great idea to work through these options prior to declaring bankruptcy, due to the fact that once you have filed the paperwork it's far too late to change your mind.

If you wish to learn more about what to do, where to turn and what issues to ask about Bankruptcy, then don't hesitate to contact Fresh Start Solutions Hobart on 1300 818 575, or go to our website: freshstartsolutions.com.au/bankruptcy-Hobart

Bankruptcy in Hobart - Choices, Choice, Choices

When it comes to Bankruptcy Hobart, there are a number of choices that we get given depending upon who we are, who we talk to, and just what has gone wrong. One of the most common trouble I see with Bankruptcy is when it comes to selecting between Debt Consolidation, Personal Insolvency Agreements, and Bankruptcy itself.

Should I consolidate my debts?

When it comes to Bankruptcy in Hobart, a lot of the info you receive on this topic will reflect the interests of the advice giver. That is why, if you call a debt consolidation firm, I can promise you they will tell you to consolidate your debts. The debt consolidation business is a multi-billion dollar industry making money in one very basic way: charging you a fee for assisting you wrap every one of your credit card and personal loans into a single neat and tidy bundle.

I hate to tell you this but these guys aren't going to be doing it for free. Please don't misunderstand me: if you feel your financial issues in Hobart might be solved by paying less interest, then go on and look into the options. Even a little amount of interest saved over years easily adds up.

Typically I find if you are reading this blog you've probably 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 already has defaults on it so no one will offer you a loan, consolidated or otherwise,.

• By the time you work all of it out, you're so far down a hole that saving a little bit of interest just won't make a great deal of difference,.

• You've quite possibly arrived at the point where you've had more than enough, you're emotionally worn down, you can't go on another day ignoring blocked calls on your phone, ignoring the demands in the mail and so on.

Personal Insolvency Agreements

So when it comes down to Bankruptcy in Hobart, what's the huge difference between a Debt Agreement and a Personal Insolvency Agreement?

Adaptability is the main point Personal Insolvency Agreements (PIA) have in their favour. They're also administered by a registered and - might I add - regulated trustee featuring the government trustee ITSA, and not a private company that advertises on TV. Ultimately this method is similar to Debt Agreements (DA): The trustee has a meeting with the people you owe money to and these experts negotiate a deal in your place. You can give a lump sum settlement figure or enter into a payment plan, or you can offer them assets as an alternative to cash. This can sound okay when it comes to the complications with Bankruptcy - that is up until you realise that one of the obstacles with PIA's is that 75 % of the people you owe money to will need to agree on the deal. If they don't, your proposal is rejected or ought to be renegotiated.

Generally the people you owe money want all their money back as well as interest. Sometimes they'll opt for beneath the amount you owe them - it's normally 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 in fact settle for.

In many cases you'll have to pay back 100 % of the debt owed. This is not 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 Bankruptcy and insolvency I've come across creditors settling 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 Hobart aren't going to get that lucky!

If you would like to find out more about what to do, where to turn and what questions to ask about Bankruptcy, then feel free to contact Fresh Start Solutions Hobart on 1300 818 575, or visit our website:freshstartsolutions.com.au/bankruptcy-Hobart

Bankruptcy in Hobart - Are you going to get bitten?

When people in Hobart ask me about Bankruptcy, I tell them the time-honored Native American Fable of the little boy and the Rattlesnake. An old rattlesnake asks a passing young boy to carry him to the mountain top to discover one last sunset before he passes away. The boy was hesitant, but the rattlesnake promised not to bite him in exchange for the ride. They travelled together only for the snake to ultimately bite the boy despite his vow not to do so. The snake's reply was 'You knew what I was when you picked me up.

Obtaining the right financial advice in Hobart when it comes to Bankruptcy is a great deal like that little boy's encounter, filled with risk and danger, and generally skewed for the benefit of the person offering the advice. Often you'll get bitten except if you know what you've picked up long before you move forward (avoid the rattlesnakes). I discovered the problem with obtaining financial advice as a teenager, and it has been vital to Bankruptcy. I'd been working hard for a few years, and saved up a little bit of money I wanted to invest. It was the early 1980s so interest rates were very high and investing your money was rather profitable. I spent a few years researching several investment options, and I went to visit a few financial advisors. It was transparent that they had more money than I did: they had great suits and plush offices, they all seemed to exude confidence and have all the solutions. What hit me was that they all had a very different strategy of what I should do. This confused me a lot that it put me off the entire idea of choosing any of them.

I'm sure currently you have read more than enough on the internet to be totally bewildered about Bankruptcy and exactly what to do. It would probably be easier for me to help you understand the nature of the financial snakes you could be grabbing while you are trying to get to the bottom of your financial issues in Hobart. Essentially, you need to try and figure out what your overarching alternatives are, do your own research into where to proceed with your plan for Bankruptcy, and after that approach what you feel is best in Hobart for your needs. Basically, you have 3 options for who to turn to.

The first option is a Solicitor - This may seem like the go-to approach when you seem to be in trouble. But there really is only just so much assistance they can give on this matter. There are absolutely specialist legal advisors in bankruptcy, but their knowledge comes along with a hefty price.

Another choice you may think of is your accountant - they are incredibly helpful and vital to the task of operating your business, but for the most part, when you are thinking about Bankruptcy, your accountant won't be much help to you anymore.

Your best option? A Financial Counsellor that can outline debt consolidation, personal insolvency agreements, and basically all you should know when it comes to Bankruptcy.

If you would like to find out more about what to do, where to turn and what questions to ask about Bankruptcy, then feel free to contact Fresh Start Solutions Hobart on 1300 818 575, or visit our website: www.freshstartsolutions.com.au/bankruptcy-Hobart.

Bankruptcy in Hobart - Changes that can help Small Business and Entrepreneurs

Do you recognize just how much Bankruptcy in Hobart is changing? The Australian Government at the end of 2015 came up with some innate changes to the Bankruptcy Laws in Australia. One of the most significant of these is the length of time that a person is bankrupt for. At this time, there is a minimum amount of time that you must stay bankrupt, having said that, this 3 year period may very well be reduced to just 12 months. So if you are inquiring about Bankruptcy, this news may be quite 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 changes to the issue of Bankruptcy will take 18 months to implement. Mr Carnegie, went on to say in the Financial Review that shielding family assets was necessary because "banks just terrorise small business and the mental health consequences to society are enormous".

The problem is Australia's bankruptcy laws deterred 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 debate surrounding this Bankruptcy issue in Hobart that some make is that this variation will only encourage fraudulent behavior opening pandora's box so to speak for the unscrupulous to violation 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 appeared in an unethical or fraudulent way, and there are no recommendations to change the effects of misrepresenting yourself or financial situation when filing for bankruptcy in Australia.

As an insolvency professional in Hobart, I have a reasonable share of knowledge when it concerns Bankruptcy. And having dealt with thousands of bankruptcy cases in Hobart I have never struck someone abusing the system or acting in an irresponsible way as to exploit the insolvency laws in Australia. When it comes to Bankruptcy, each week I help a small business owner or entrepreneur suffer through the very challenging task of bankruptcy, not once have I felt they are happy about it. The normal small business owner or entrepreneur in Hobart does not start out taking enormous financial risks with the intent to fail. The media prefers citing the apparent injustice 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 best and brightest in Hobart not get tossed out of the game financially for financial decisions often out of their control. Most small business owners I help with Bankruptcy, are hardworking, tax paying, employers keeping this country going.

Now there is a fine line with the things the government is trying to do here, because they are trying to balance helping individuals who have made decisions out of their control, and preventing people from making miscalculations that land them in trouble and as a result an issue of Bankruptcy. However you also don't want to get rid of the experience and knowledge that business owners have. You surely don't want to shatter people simply because they have had a genuine failure in a large or small start-up project that has not succeeded.

At the major end of town large developed 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 project doesn't work out.

The government's proposed '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 alterations will be detrimental to Australia's economy, indeed 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 enormous. When it comes to Bankruptcy in Hobart 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 need some help with your debts in Hobart or are just thinking of Bankruptcy, don't hesitate to contact us here at Fresh Start Solutions Hobart on 1300 818 575, or visit our website: WWW.freshstartsolutions.com.au/bankruptcy-hobart