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

Bankruptcy Melbourne is a difficult process, but I know from meeting with thousands facing the possibility of bankruptcy over the years, that not much worries people more than the thought of losing the family home or apartment. Almost everyone is on an emotional level connected to their home - it's where the kids have grown up, it's where you appreciate life on a day to day basis.

Will you lose your house if you go bankrupt? The solution is a resounding maybe. (not very helpful, I know) People typically assume 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 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 Melbourne 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 idea.

The duty of the bankruptcy trustee is to firstly abide by the regulation of the bankruptcy act 1966 (it's a very dry read about 600 pages if you are intrigued).

Within that regulatory framework, the trustee is to help recover monies owed to your creditors, that is carried out in a bunch of various 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 off any assets that can contribute to fixing your debts.

What this seems 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 increasingly since the GFC as house prices in many locations have been heading south so what you paid 4 years ago may not always reflect the price today.

A quick word of advice here if you have a house in Melbourne 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 customers? wouldn't they need to sell your house and not take the risk? The bank that has kindly lent you the money for your house is generating good money every month in interest out of you, month in month out, just as long as you keep up to date with your repayments then the bank desires you in there at all costs. Ultimately however it's not the bank's call if the trustee decides that there is a lot of equity in your house the trustee will force you and the bank to sell the house.

When you file for bankruptcy you are asked to put down 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 suggestions or a real estate agents advice to get to this figure. When you get a valuer out to your property, make sure 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. These days 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 sway the result. The idea is that you want a life-like sell now figure.

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

When it concerns Bankruptcy and houses, another major consideration is ownership, in many cases houses are bought 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 probably 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 information on this area of Bankruptcy because it is very tricky and every case is different.

If you want to learn more about what to do, where to turn and what questions to ask about Bankruptcy, then feel free to call Bankruptcy Melbourne on 1300 795 575, or visit our website:bankruptcymelbourne.com.

Bankruptcy in Melbourne - Who exactly do I speak to?

Should I speak with my accountant about Bankruptcy?

The answer seems obvious doesn't it: if anybody knows your financial situation well in Melbourne, 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 Bankruptcy, it's that his expertise lie in helping you save you money at tax time, lowering your tax liability and lodging your BAS.

Most accounting degrees will put in very little to no time on bankruptcy, it's generally done as a post graduate speciality program for those who want to work in the field. Unless your accountant is an insolvency expert, he won'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 happen to find an insolvency accounting firm in Melbourne, they tend to be large firms with very nice office spaces who charge accordingly.

Should I speak to my Solicitor about Bankruptcy?

No! You can talk with your solicitor in Melbourne but more than likely it won't do you much good. Solicitors are really 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 Melbourne often 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 except if you have a law or accounting degree.

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

Should I speak to a financial counsellor about Bankruptcy?

Yes! There are lots of financial counselling services to help you through this, they have no hidden agendas and they're an excellent option for helping you think through your situation when it comes to Bankruptcy. If you are stressing out constantly, not sleeping, not eating or over-eating and thinking of money pressures regularly, then get some help.

There are also charitable organizations around Melbourne like Lifeline that offer a remarkable service. They will be a sounding board if you just need somebody to discuss with you what your alternatives are. Don't let your financial issue destroy your life - ultimately it's just money.

If you wish to learn more about what to do, where to turn and what points to ask about Bankruptcy, then feel free to get in touch with Bankruptcy Melbourne on 1300 795 575, or visit our website: bankruptcymelbourne.com

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

When people in Melbourne come to me planning to talk about Bankruptcy, they are usually loaded 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 it more clear. One of the very most general problems is 'Will I lose my business if I declare bankruptcy?' The brief answer is no. If you are an owner of a business any shape or size you can keep your business if you want to. In Melbourne, businesses that eventually become insolvent have a few options just like liquidation, voluntary administration and so on. It's people who go bankrupt not businesses.

Bankruptcy is a complicated area so get some expert advice on this if you have a business. Generally speaking, the financial debts in a business and personal debts go hand in hand when a business owner declares bankruptcy. There are several necessary implications for directors of companies when it comes to Bankruptcy in Melbourne: A bankrupt can not be a director of a company, so if you have a pty ltd company you will likely need to resign as a director after you're bankrupt.

A constraint that applies when you are generally bankrupt as a business owner is that you can be in your very own business as a sole trader only. There are things you will need to reveal as a part of that but generally 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 as a consequence you can not trade without that license, so make sure you are asking the ideal questions when it involves licenses and Bankruptcy in Melbourne.

On the other hand if your business is not impacted directly by such issues, then you'll have to restructure the way you run your business. There are considerations when and if you go bankrupt as a business owner: you can not rack up heaps of debt in your company, then go bankrupt and after that open the doors the next day like almost nothing had happened. There are laws in place to avoid what is called phoenix companies growing out of the ashes of an old company.

Having said that, it's just an issue of talking with the best people about Bankruptcy. In this circumstance you may believe you need a liquidator for your company, and you may be right, but keep in mind that every liquidator is distinct and have their own motives. Liquidators profit from your liquidation - heaps of money - so what advice do you think you will get?

When it comes to Bankruptcy, I consider that giving generic advice in this area is possibly damaging as it can have very significant implications for directors and business owners. This is considering that 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 limit to the size of the business you run though you are bankrupt. You can employ staff. You can constantly deal with your manufacturers 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 overly upset about what you can and can't do as a business owner, just get the right advice ... If you wish to learn more about what to do, where to turn and what questions to ask about Bankruptcy, then feel free to consult Bankruptcy Melbourne on 1300 795 575, or visit our website: bankruptcymelbourne.com

Bankruptcy in Melbourne - Changes that help Small Business and Entrepreneurs

Do you know how much Bankruptcy Melbourne is changing? The Australian Government at the end of 2015 moved for some radical 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. Now, there is a minimum amount of time that you must remain bankrupt, however, this 3 year period may in fact be reduced down to just 12 months. So if you are asking about Bankruptcy, this news may be somewhat important to you.

Mark Carnegie in the Financial Review on the 7th December 2015 recommended 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 adjustments to the issue of Bankruptcy will take 18 months to implement. Mr Carnegie, went on to say in the Financial Review that protecting family assets was important 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 argument about this Bankruptcy issue in Melbourne that some make is that this change will only push fraudulent behavior opening pandora's box in a manner of speaking for the unscrupulous to misuse of the bankruptcy system. We have looked 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 performed in an unethical or fraudulent way, and there are no suggestions to change the repercussions of misrepresenting yourself or financial situation when filing for bankruptcy in Australia.

As a bankruptcy professional in Melbourne, I have a fair share of practical experience when it comes to Bankruptcy. And having dealt with thousands of bankruptcy cases in Melbourne I have never come across someone abusing the system or acting in a careless way as to exploit the insolvency laws in Australia. When it comes to Bankruptcy, every week I help a small business owner or entrepreneur look at the very challenging task of bankruptcy, not once have I thought they are happy about it. The average small business owner or entrepreneur in Melbourne does not start out taking enormous financial risks with the intention to fail. The media really loves citing the apparent abuse that will be rampant if these changes occur, what a joke!

A Win for Small Business

These proposed changes will be good for often the most effective and brightest in Melbourne not get tossed out of the game financially for financial decisions often outside of their control. Most small business owners I help with Bankruptcy, are hardworking, tax paying, managers keeping this country going.

There certainly is a fine line with just what the government is trying to do here, since they are attempting to balance helping people who have made decisions out of their control, and dissuading people from making problems that land them in trouble and as a result an issue of Bankruptcy. However you also don't want to wipe out the experience and knowledge that business owners have. You definitely don't want to smash people simply because they have had a sincere failure in a large or small start-up enterprise that has not panned out.

At the big end of town large established companies have long been criticised for their failure to innovate - lets face it they would be more likely to do so if the risks of insolvency were lowered because directors are distressed they'll be personally responsible in an insolvency arrangement if the new project doesn't work out.

The government's suggested 'safe haven' modifications 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 differences will be harmful to Australia's economy, indeed these bankruptcy laws will save the tax payer in all areas of health - Especially in the mental health industry because the emotional cost of bankruptcy is enormous. When it comes to Bankruptcy in Melbourne not a day goes by where I don't find out the tragic experiences of relationship failures, thoughts of suicide and the list continues.

Bankruptcy helps save lives, and it could save yours. If you really need some assistance with your debts in Melbourne or are just considering Bankruptcy, don't hesitate to phone us here at Bankruptcy Melbourne on 1300 795 575, or visit our website: bankruptcymelbourne.com.

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

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

Involuntary bankruptcy occurs when a person you owe money to applies to the court to declare you bankrupt. Usually when you get one of those notices, you have normally 21 days to pay all the debt. If you don't, then the creditor goes back to the court and requests the court to issue a sequestration order that declares you bankrupt. A trustee is selected, and then you have 14 days to get the paperwork in and then you are bankrupt.

You can contest a bankruptcy notice by going to court shortly after the 21 days have expired and put your case forward, to prevent 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 overseen to in the same way.

However, when it comes to Bankruptcy for this, the stress, torment and fear that accompanies this method is incredible. If you think you are probable to be made bankrupt by someone, get some tips 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 generally too late.

Voluntary Bankruptcy

However, when it comes to Bankruptcy, sometimes there are moments that it is the most ideal option. So you may need to ask yourself, 'when should I consider voluntary Bankruptcy?'.

This question is not the same for every person of course, but usually I find that one way you could work it out is to figure out just how long it will take you to pay all 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 came to me once regarding * Bankrupcty tell me that her credit card statement calculated how long her debt would take to pay at the rate she was paying off 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 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 need to approach Bankruptcy.

In many ways, the ease with which companies/credit providers can default your credit file is not fair. The punishment doesn't seem to amount to the crime in my book. So if you actually 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 factor 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 variation is that with a DA or PIA you pay back the money and nevertheless have it on your file for 7 years.

Bankruptcy

I have talked about the word a few times now, but when it comes down to it, Bankruptcy is the biggest part, and the element more 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 specific country the arrangements are very generous: you can go bankrupt owing millions of dollars and after 3 years it's all over with no strings attached. Compared to countries like the United States, our bankruptcy laws are extremely reasonable.

I don't claim to know why that is but a couple of hundred years ago debtors went to prison. Nowadays I suppose the government finds that 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 every one 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 take care of a car accident if the car was not actually insured.

There is far more that can be said about this and Bankruptcy in general but the objective of this blog was to help you decide between a few readily available options. When getting some advice, remember that there are always possibilities when it relates to Bankruptcy in Melbourne, so do some study, and Good luck!

If you would like to learn more about just what to do, where to turn and what questions to ask about Bankruptcy, then feel free to contact Bankruptcy Melbourne on 1300 795 575, or visit our website: bankruptcymelbourne.com

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

Bankruptcy Melbourne is a confusing process, and you need to ensure you get the right guidance. And when it comes to your income being affected, the answer to the question is maybe. The first thing you have to know about going bankrupt is there is no constraint on how much you can earn. However, I will mention 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 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 each year. 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 raises the threshold amount, if you have financial commitments in Melbourne like medical, child care, serious travel to and from work, or a situation where your partner used to work but is no longer able to support the household income.

Some of the informative parts of Bankruptcy is that your employer will not be notified when you file for bankruptcy. Also, Child support is always taken into account 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 a lot more issues involving income and what is or isn't regarded as income - if you're not exactly sure, it's a good idea 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 viable 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 contribute toward your tax bill. If you don't have a tax bill then you will keep your tax refund as long as that doesn't take you over your threshold income caps.

If you believe that when it comes to Bankruptcy, your situation is more intricate, then please get expert advice in Melbourne. I may seem like a broken record, but remember that it's always a good idea to work through these options before declaring bankruptcy, because once you have filed the paperwork it's too late to change your mind.

If you want to learn more about what to do, where to turn and what issues to ask about Bankruptcy, then don't hesitate to contact Bankruptcy Melbourne on 1300 795 575, or visit our website: bankruptcymelbourne.com

Bankruptcy in Melbourne - Are you going to get bitten?

When people in Melbourne ask me about Bankruptcy, I let them know the simple 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 see one last sunset before he passes away. The boy was reluctant, but the rattlesnake pledged not to bite him in exchange for the ride. They travelled together only for the snake to ultimately attack 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 Melbourne when it concerns Bankruptcy is a whole lot like that little boy's journey, fraught with risk and danger, and typically skewed for the benefit of the person providing the advice. In most cases you'll get bitten except if you know what you've picked up before you move forward (avoid the rattlesnakes). I discovered the problem with obtaining financial advice as a teenager, and it has been key to Bankruptcy. I'd been keeping my nose to the grindstone 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 rather high and investing your money was really profitable. I spent a few years researching varied investment options, and I went to visit a few financial advisors. It was crystal clear that they had more money than I did: they had great suits and plush offices, they all appeared to exude confidence and have all the answers. What hit me was that they all had a really different idea of what I should do. This puzzled me so much that it put me off the whole idea of opting for any of them.

I'm sure currently you have read enough on the internet to be totally puzzled about Bankruptcy and exactly what to do. It would most likely be easier for me to help you learn about the nature of the financial snakes you may be grasping while you are trying to get to the bottom of your financial troubles in Melbourne. In essence, you need to try and understand what your overarching alternatives are, do your very own research into where to proceed with your plan for Bankruptcy, and then approach what you feel is best in Melbourne for your needs. Basically, you have 3 options for who to turn to.

The first option is a Solicitor - This may look like the go-to choice when you appear to be in trouble. But there certainly is only so much help they can give on this matter. There are definitely specialist legal advisors in bankruptcy, but their expertise includes a hefty price.

Another possibility you may consider is your accountant - they are incredibly helpful and vital to the process of operating your business, but for the most part, when you are considering Bankruptcy, your accountant won't be much help to you anymore.

Your best option? A Financial Counsellor that can talk about debt consolidation, personal insolvency agreements, and virtually all you have 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 speak to Bankruptcy Experts Melbourne on 1300 795 575, or visit our website: bankruptcymelbourne.com