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

Bankruptcy Melbourne is a complex process, but I know from meeting with thousands facing the prospect of bankruptcy over the years, that nothing worries people more than the thought of losing the family house. Almost everybody is psychologically connected to their home - it's where the children have grown up, it's where you enjoy life on a day to day basis.

Will you lose your home 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 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 advantage 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 theory behind the Bankruptcy process as administered by the trustee, then you'll have a more clear image.

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

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

What this sounds like is that yes the trustee will sell your house right? Not necessarily. The only reason the trustee will sell off any asset including your house is to get money to repay your debts. If there is no equity in your house 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 automatically 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 plenty of variables in these scenarios that need to be considered.

You might wonder, why would the bank want bankrupt clients? wouldn't they prefer to sell your house and not take the risk? The bank that has nicely lent you the money for your house is earning good money every month in interest out of you, month in month out, so long as you keep up to date with your monthly payments then the bank desires you in there at all costs. Essentially however it's not the bank's call if the trustee establishes that there is ample equity in your house the trustee will force you and the bank to sell the house.

When you file for bankruptcy you are asked to put down the value of your house and the level you owe on the house. A tip if you are attempting to work out the value of your house: use a registered valuer as this will give you peace of mind, don't use your neighbours' gut feel recommendations or a real estate agents advice to 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, make sure you mow the lawn and don't leave the kitchen in a mess also.

Valuers used to provide 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 your home 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 system is critical to you: one you will likely have peace of mind ascertaining the market value of your house, and then you can easily build your equity position. The second thing is, your property may be really worth so much more than you thought. Get some guidance before doing this. The number of times I've met with 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 main consideration is ownership, often houses are bought in joint names. In other words 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 possibly numerous scenarios that are likely when it relates to the family home. Bear in mind the non-bankrupt party can buy the bankrupt's portion of the property in bankruptcy also. I have to repeat this but get some assistance on this area of Bankruptcy because it is very tricky and every single case is different.

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

Bankruptcy in Melbourne - Who do I talk to?

Should I talk with my accountant about Bankruptcy?

The answer seems obvious doesn't it: if anyone knows your financial situation well in Melbourne, It's going to be your accountant. However, the short answer is a resounding No! It's not that your accountant may not 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, reducing your tax liability and lodging your BAS.

Most accounting degrees will put in very little to no time on insolvency, it's generally carried out as a post graduate specialty course for those who intend to work in the field. Unless your accountant is an insolvency expert, he would not 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 manage to find an insolvency accounting firm in Melbourne, they have the tendency 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 Melbourne but more than likely it won't do you much good. Solicitors are definitely good at doing things lawyers do, like assisting you do your Will and buying your house and trying to keep you out of court if you're lucky. When it concerns Bankruptcy, the specialists in Melbourne generally have either a legal or accounting experience, and the main reason for that is simply that you can't start in the post graduate study to become a qualified insolvency practitioner until 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 find one you will pay a hefty price for their expertise.

Should I talk to a financial counsellor about Bankruptcy?

Yes! There are a lot of financial counselling services to aid you with this, they have no hidden agendas and they're a great option for helping you analyze your circumstance when it comes to Bankruptcy. If you find yourself stressing constantly, not sleeping, not eating or over-eating and thinking of money pressures regularly, then get some help.

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

If you want 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 Fresh Start Solutions Melbourne on 1300 818 575, or visit our website: www.freshstartsolutions.com.au/bankruptcy-Melbourne

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 always filled with questions. The internet has lots 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 popular issues is 'Will I lose my business if I declare bankruptcy?' The short answer is no. If you are a manager 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 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 one if you have a business. Generally speaking, the financial obligations in a business and personal debts go hand in hand when a business owner goes bankrupt. There are several important implications for directors of companies when it pertains to Bankruptcy in Melbourne: A bankrupt can not be a director of a company, so if you have a pty ltd company you will definitely need to retire as a director once you're bankrupt.

A limitation that applies when you are generally bankrupt as a business owner is that you may be in your very own business as a sole trader only. There are things you will need to reveal as an aspect of that but in essence 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 therefore you can no longer trade without that license, so make sure you are asking the ideal questions when it concerns licenses and Bankruptcy in Melbourne.

Having said that 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 acquire heaps of debt in your company, then go bankrupt and after that open the doors the next day like absolutely 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 a matter of consulting with the right people about Bankruptcy. In this circumstance you may think you need a liquidator for your business, and you might be right, but bear in mind that every liquidator is distinct and have their own motives. Liquidators earn money from your liquidation - heaps of money - so exactly what advice do you think you will get?

When it comes to Bankruptcy, I believe that giving generic advice in this area is possibly perilous as it can have very major implications for directors and business owners. This is considering that it is one of those cases where what the right advice for one business owner is the inappropriate advice for the other. There are some principles however, that you may benefit from. There is no restriction to the size of the business you run while you are bankrupt. You can employ staff. You can constantly deal with your vendors 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 uneasy about what you can and can't do as a business owner, just get the best advice ... If you wish to learn more about what to do, precisely where to turn and what questions to ask about Bankruptcy, then feel free to call Fresh Start Solutions Melbourne on 1300 818 575, or visit our website: www.freshstartsolutions.com.au/bankruptcy-Melbourne

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

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

Involuntary bankruptcy takes place when someone you owe money to applies to the court to declare you bankrupt. Generally when you get one of those notices, you have normally 21 days to pay all the debt. If you do not, then the creditor returns to the court and asks the court to issue a sequestration order that declares you bankrupt. A trustee is appointed, and then you have 14 days to get the documentation in and then you are bankrupt.

You can contest a bankruptcy notice by going to court right 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 fact no distinction between Involuntary Bankruptcy and or Voluntary Bankruptcy - once you are simply declared bankrupt, they're administered to in the same way.

However, when it comes to Bankruptcy for this, the stress, torment and fear that accompanies this process is incredible. If you think you are in all likelihood to be made bankrupt by someone, get some guidance and act on that advice. Generally I've found it's always far better to know what you can and can't do before you have someone bankrupt you. Once you are bankrupt, it's generally far too late.

Voluntary Bankruptcy

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

This question is not the very same for every person of course, but commonly I find that one way you could work it out is to figure out just how long it will take you to pay each of your debts - if its longer than 3 years (the period you are declared bankrupt), then this may really 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 off her account, and it was 35 years! Imagine 35 years for one credit card bill.

Credit rating damage can really help you think this through. If you move house and forget to pay your $30 phone bill for 6 months more, it's very likely the telephone company will default your credit file. That default will sit on your file for 5 years, so for $30 you can have your credit file truly 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 unfair. The punishment doesn't seem to equate 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 erased 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 variation is that with a DA or PIA you pay back the money and still have it on your file for 7 years.

Bankruptcy

I have mentioned the word a few times now, but when it comes down to it, Bankruptcy is the biggest part, and the element more people are afraid of when they come to me to review their financial situation and Bankruptcy. The other side of crime and punishment equation is bankruptcy, and in this specific country the provisions are very generous: you can go bankrupt owing millions of dollars and after 3 years it's all finished with no strings attached. Compared with countries like the United States, our bankruptcy laws are quite generous.

I don't pretend to know why that is but a few hundred years ago debtors went to prison. These days I suppose the government thinks 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 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 insured.

There is a lot 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 available options. When getting some advice, bear in mind that there are always options when it relates to Bankruptcy in Melbourne, so do some study, and Good luck!

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

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

Bankruptcy Melbourne is a complex process, and you need to make sure 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 need to know about going bankrupt is there is no restriction on how much you can earn. However, I will mention that your income is a major consideration when working through when it comes to Bankruptcy.

The first thing you need to learn 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 you earn per year. A dependant is someone who lives with you and earns less than $3,124 per year (regardless of their age).

You can request a hardship variation that increases the threshold amount, if you have financial commitments in Melbourne such as medical, child care, significant 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 interesting 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 altered net income limit will be $55,332.10.

There are many more issues covering income and what is or isn't considered income - if you're unsure, it's ideal to get qualified advice. The reason you must consider your income as a part of the Big 5 questions here is that bankruptcy is in some instances 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 as long as that doesn't take you over your threshold income limitations.

If you think when it comes to Bankruptcy, your case is more complex, then please get professional 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, due to the fact that once you have filed the paperwork it's too late to change your mind.

If you would like 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 Melbourne on 1300 818 575, or go to our website: freshstartsolutions.com.au/bankruptcy-Melbourne

Bankruptcy in Melbourne - Choices, Choice, Choices

 When it comes to Bankruptcy Melbourne, there are a bunch of options that we get given depending upon who we are, who we talk to, and just what has happened. One of the most common confusion I see with Bankruptcy is when it comes to choosing between Debt Consolidation, Personal Insolvency Agreements, and Bankruptcy itself.

Should I consolidate my debts?

When it comes to Bankruptcy in Melbourne, most of the facts you receive on this subject matter 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 operation is a multi-billion dollar industry making money in one very basic way: charging you a fee for helping you wrap every one of your credit card and personal loans into one neat and tidy package.

I hate to tell you this but these people won't be doing it for free. Please do not misunderstand me: if you feel your financial troubles in Melbourne could be solved by paying less interest, then go on and check out the possibilities. Even a tiny amount of interest saved over years quickly adds up.

Usually I find if you read this blog you've probably tried to consolidate your debts already and come to the following realisations similar to these:

• Your credit rating is not good, and your credit file definitely has defaults on it so no one will give you a loan, consolidated or otherwise,.

• By the time you work 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 undoubtedly reached the stage where you've had enough, you're emotionally worn down, you can't go on yet another day ignoring blocked calls on your phone, ignoring the demands in the mail etc.

Personal Insolvency Agreements

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

Flexibility 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 featuring the government trustee ITSA, and not a private organization that advertises on TV. Ultimately this method resembles Debt Agreements (DA): The trustee holds a meeting with the people you owe money to and these guys work out a deal in your place. You can give a lump sum settlement figure or take part in a payment plan, or maybe you can offer them assets as an alternative to cash. This may sound okay when it comes to the issues 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 must come to an understanding the deal. If they do not, your plan is rejected or ought to be renegotiated.

Generally people you owe money want all their money back plus interest. Sometimes they'll go for beneath 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 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 heard of creditors opting for less 80 % on rare occasions, but that usually only occurs with a public company going 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 Melbourne aren't going to get that lucky!

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

Bankruptcy in Melbourne - Are you going to get bitten?

When people in Melbourne 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 see 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 journeyed together only for the snake to ultimately bite the boy despite his vow not to do so. The snake's answer was 'You knew what I was when you picked me up.

Getting the right financial advice in Melbourne when it comes to Bankruptcy is a whole lot like that little boy's journey, fraught with risk and danger, and usually skewed for the benefit of the person supplying 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 central 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 quite high and investing your money was quite profitable. I spent time researching various 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 seemed to exude confidence and have all the answers. What struck me was that they all had a truly different strategy of what I should do. This baffled me so much that it put me off the entire idea of picking any of them.

I'm sure by now you have read more than enough on the internet to be totally lost about Bankruptcy and what to do. It would undoubtedly be easier for me to help you understand the nature of the financial snakes you might be grabbing while you are trying to get to the bottom of your financial concerns in Melbourne. Essentially, you need to try and comprehend what your overarching choices are, do your very own research into where to proceed with your plan for Bankruptcy, and after that approach just 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 seem the go-to approach when you seem to be in trouble. But there is only so much support they can give on this matter. There are absolutely specialist legal advisors in bankruptcy, but their expertise comes with a hefty price.

Another choice you may think about is your accountant - they are incredibly useful and vital to the process of running 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 talk about debt consolidation, personal insolvency agreements, and basically all you should understand 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 consult with Fresh Start Solutions Melbourne on 1300 818 575, or visit our website:freshstartsolutions.com.au/bankruptcy-Melbourne