Bankruptcy Perth, What is the Deal with Debts?

Which Debts are erased if I go Bankrupt?

The easy answer is that when it involves Bankruptcy most debts are wiped, and I have added a chart 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 wiped out when you file for bankruptcy.

What about Secured Debts?

A secured debt is a car loan or a home loan; it is a debt that has some actual security affixed 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 removed if I file for bankruptcy?

Yes. If you have a car loan for $40,000 you can have that debt cleared away if you simply hand back the car. So the lesson is that you cannot have your cake and eat it too (so to speak), so yes all of your secured debts can be wiped but the asset must be sold or returned. This is just one element that, when it comes to Bankruptcy, it is important to get professional help - like that available at Bankruptcy Experts Perth.

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 erased 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 right here over at Bankruptcy Experts Perth if you have any questions on 1300 795 575. Or feel free to check out our website: www.bankruptcyexpertsPerth.com.au

What about my business or Company debts?

In some cases when it involves Bankruptcy we can assist you with your business debts, call us concerning this first. Remember bankruptcy applies to an individual not companies, trusts or businesses. Normally you may have to liquidate a company to deal with the debt that way. And 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 Experts Perth we specialise in business and personal debts so give us a call here at Bankruptcy Experts Perth if you have any questions about Bankruptcy on 1300 795 575. Or feel free to visit our website: www.bankruptcyexpertsPerth.com.au

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

Bankruptcy Perth is a difficult to understand process, but I know from meeting with thousands facing the likelihood of bankruptcy over the years, that not a thing troubles people more than the notion of losing the family house. Almost everyone is sentimentally connected to their home - it's where the children have grown, it's where you take pleasure in life on a day to day basis.

Will you lose your house if you go bankrupt? The answer is a resounding maybe. (not very helpful, I know) People typically feel that it's an inevitable consequence and a part of Bankruptcy, and therefore 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 agreed to pay back the debt you are in.

So how is it possible to keep my Perth 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 image.

The function of the bankruptcy trustee is to firstly comply with the regulation of the bankruptcy act 1966 (it's a very plain read about 600 pages if you are serious).

Within that regulatory framework, the trustee is to help recuperate 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 over and above your income threshold. The other role is to sell off any assets that can contribute to paying back your debts.

What this sounds like is that yes the trustee will sell your house right? Not always. 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 home then it's pointless to sell your home. This is happening increasingly 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 tip here if you have a house in Perth and are looking at Bankruptcy: get an expert to help you through this process, there are a number of variables in these scenarios that need to be considered.

You might wonder, why would the bank want bankrupt clients? wouldn't they hope to sell your house and not take the risk? The bank that has nicely lent you the money for your house is making good money every month in interest out of you, month in month out, provided that you keep up to date with your fees then the bank really wants you in there at all costs. Essentially however it's not the bank's call if the trustee determines that there is lots 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 jot down the value of your house and the amount of money 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 provide you peace of mind, don't use your neighbours' gut feel tips or a real estate agents advice to come to 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, 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 sensitive 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 control the result. The idea is that you want a real sell now figure.

There are two reasons this valuation technique is critical to you: one you can have peace of mind ascertaining the market value of your house, and then you can easily create your equity position. Second of all, your house may be worth so much more than you thought. Get some guidance before doing this. The amount of times I've seen clients that have sold their family home of 20 years just to figure out I could of helped them keep it; unfortunately this happens all too often

When it comes to Bankruptcy and houses, another notable consideration is ownership, in many cases houses are acquired 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 involves Bankruptcy, this is just one of potentially hundreds of scenarios that are possible when it comes to the family home. Bear in mind the non-bankrupt party can buy the bankrupt's portion of the house in bankruptcy also. I need to 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 speak to Bankruptcy Experts Perth on 1300 795 575, or visit our website: www.bankruptcyexpertsPerth.com.au.

Bankruptcy in Perth - Who exactly do I talk to?

Should I get in touch with my accountant about Bankruptcy?

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

Most accounting degrees will put in hardly any to no time on insolvency, it's generally carried out as a post graduate speciality course for those who wish to work in the field. Unless your accountant is an insolvency expert, he wouldn't know that a lot about the effects of Bankruptcy, I can guarantee you insolvency specialists know much about tax returns or BAS in. If you do manage to find an insolvency accounting firm in Perth, they often tend to be large firms with very nice offices who charge accordingly.

Should I consult with my Solicitor about Bankruptcy?

No! You can speak to your solicitor in Perth but more than likely it won't do you much good. Solicitors are certainly 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 relates to Bankruptcy, the specialists in Perth tend to have either a legal or accounting experience, 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 as there are few insolvency accounting firms, there are very few insolvency legal practices in Australia, and yes if you choose one you will pay a sizeable price for their expertise.

Should I talk to a financial counsellor about Bankruptcy?

Yes! There are a lot of financial counselling services that can help you with this, they have no hidden agendas and they're a great option for letting 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 of money pressures continuously, then get some help.

There are also charities around Perth like Lifeline that offer a terrific service. They will be a sounding board if you just need a person to review with you what your options are. Don't let your financial trouble destroy your life - in the end it's just money.

If you like to learn more about what to do, where to turn and what issues to ask about Bankruptcy, then feel free to call Bankruptcy Experts Perth on 1300 795 575, or visit our website: www.bankruptcyexpertsPerth.com.au.

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

When it comes to Bankruptcy Perth, commonly people aren't aware that there are both voluntary, and involuntary bankruptcy - both have different methods and guidelines.

Involuntary bankruptcy occurs when somebody you owe money to involves the court to declare you bankrupt. Commonly when you get one of these particular notices, you have actually 21 days to pay all the debt. If you do not, then the creditor goes back to the court and requests the court to provide a sequestration order that declares you bankrupt. A trustee is selected, and then you have 14 days to get the paperwork in and after that you are bankrupt.

You can challenge a bankruptcy notice by going to court immediately after the 21 days have expired and put your case forward, to avoid it going to the next level. Apart from the way you became bankrupt there is in reality no difference between Involuntary Bankruptcy and or Voluntary Bankruptcy - once you are simply 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 in all likelihood to be made bankrupt by someone, get some help and act on that advice. Generally I've found it's always more ideal to know what you can and can't do before you have someone else bankrupt you. Once you are bankrupt, it's normally too late.

Voluntary Bankruptcy

Nevertheless, when it comes to Bankruptcy, sometimes there are times 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 each person of course, but normally I find that one way you could work it out is to figure out 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 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 level 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 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 affect how you have to approach Bankruptcy.

In many ways, the ease with which companies/credit providers can default your credit file is improper. 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, keep in mind 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 factor 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 difference 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 element most people are afraid of when they come to me to go over their financial situation and Bankruptcy. The other side of crime and punishment equation is bankruptcy, and in this 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. As compared to countries like the United States, our bankruptcy laws are really generous.

I don't claim to know why that is but a couple of hundred years ago debtors went to prison. These days 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 take care of a car accident if the car was not actually insured.

There is much more that can be said about this and Bankruptcy in general but the purpose of this blog was to help you decide between a few possible options. When getting some advice, keep in mind that there are always possibilities when it concerns Bankruptcy in Perth, so do some investigation, and Good luck!

If you wish to find out more about exactly what to do, where to turn and what questions to ask about Bankruptcy, then don't hesitate to contact Bankruptcy Experts Perth on 1300 795 575, or visit our website: bankruptcyexpertsPerth.com.au.

Bankruptcy in Perth - Will my income be affected if I go bankrupt?

Bankruptcy Perth is a challenging process, and you should make sure you get the right guidance. 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 limit 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 first thing you need to know 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 each year. 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 strains in Perth like medical, child care, sizable travel to and from your job, or a situation where your partner used to work but is not able to support the family income.

Some of the insightful 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 pay $5,000 child support each year and you have no dependents living with you then your altered net income limit will be $55,332.10.

There are much more issues involving income and what is or isn't regarded as income - if you're not exactly sure, it's ideal to get specialist advice. The reason you should 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 whilst you are bankrupt to add 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 restrictions.

If you think when it comes to Bankruptcy, your situation is more complicated, then feel free to get qualified advice in Perth. I may sound like a broken record, but remember that it's always a smart idea to overcome these options prior to declaring bankruptcy, because once you have filed the paperwork it's too late to change your mind.

If you would like to find out more about what to do, where to turn and what questions to ask about Bankruptcy, then don't hesitate to contact Bankruptcy Experts Perth on 1300 795 575, or visit our website: bankruptcyexpertsPerth.com.au.

Bankruptcy in Perth - Choices, Choice, Choices

When it comes to Bankruptcy Perth, there are a great deal of options that we get given depending on who we are, who we speak with, and just what has happened. Among 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 Perth, a lot of the help and advice you receive on this topic will reflect the interests of the advice giver. That is why, if you call a debt consolidation company, I can assure you they will tell you to consolidate your debts. The debt consolidation business is a multi-billion dollar industry making money in one very simple way: charging you a fee for aiding you wrap every one of your credit card and personal loans into one neat and tidy bundle.

I hate to tell you this but these people aren't doing it free of charge. Please do not misunderstand me: if you feel your financial issues in Perth can possibly be solved by paying less interest, then go on and look into the choices. Even a tiny amount of interest saved over years quickly adds up.

More often than not I find if you read 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 nonpayments on it so not a single person 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 on a tiny bit of interest just won't make a great deal of difference,.

• You've most likely gotten to the stage where you've had more than enough, you're mentally fatigued, you can't go on yet 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 Perth, what's the big 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 - may I add - regulated trustee including the government trustee ITSA, and not a private firm 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 these guys mediate a deal on your behalf. 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 may sound alright when it comes to the troubles with Bankruptcy - that is until you realise that one of the obstacles with PIA's is that 75 % of the people you owe money to will have to agree on the deal. If they do not, your proposal is denied or must be renegotiated.

Generally the people you owe money prefer all their money back plus interest. Sometimes they'll opt for under the amount you owe them - it's typically a percentage of the debt - but allow me to 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 really settle for.

In most 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 agreed 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 choosing 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 Perth aren't going to get that lucky!

If you want to learn more about what to do, where to turn and what questions to ask about Bankruptcy, then feel free to get in touch with Bankruptcy Experts Perth on 1300 795 575, or visit our website:bankruptcyexpertsPerth.com.au.

Bankruptcy in Perth - Are you going to get bitten?

When people in Perth ask me about Bankruptcy, I let them know the classic 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 vowed not to bite him in exchange for the ride. They went together only for the snake to in the end attack the boy despite his promise not to do so. The snake's response was 'You knew what I was when you picked me up.'.

Getting the right financial advice in Perth when it concerns Bankruptcy is a great deal like that little boy's encounter, laden with risk and danger, and typically skewed for the benefit of the person presenting the advice. In many cases you'll get bitten except if you know what you've picked up long before you move forward (avoid the rattlesnakes). I learned the problem with obtaining financial advice as a teenager, and it has been necessary 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 quite high and investing your money was quite profitable. I spent some time researching different investment options, and I went to visit a few financial advisors. It was clear that they had more money than I did: they had nice suits and plush offices, they all seemed to exude confidence and have all the solutions. What struck me was that they all had a really different strategy of what I should do. This frustrated me so much that it put me off the entire idea of selecting any of them.

I'm sure currently you have read enough on the internet to be totally bewildered about Bankruptcy and what to do. It would undoubtedly be easier for me to help you comprehend the nature of the financial snakes you might be grabbing while you are attempting to get to the bottom of your financial concerns in Perth. In essence, you need to try and recognize what your overarching alternatives are, do your very own research into where to proceed with your strategy for Bankruptcy, and then approach what you feel is best in Perth for your requirements. Essentially, you have 3 options for who to turn to.

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

Another possibility you may think about is your accountant - they are incredibly helpful and vital to the process of managing your business, but for the most part, when you are thinking of Bankruptcy, your accountant won't be much help to you any more.

Your best option? A Financial Counsellor that can outline debt consolidation, personal insolvency agreements, and basically all you need to figure out 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 call Bankruptcy Experts Perth on 1300 795 575, or visit our website: www.bankruptcyexpertsPerth.com.au.