Superannuation is puzzling enough, let alone when you have to think about Bankruptcy too. At Bankruptcy Experts Gympie we often have people questioning us about what can take place to their super, and if you possess a regulated or industry fund (like most superfunds) then your super is safe, and Bankruptcy will have no impact upon your super. Nonetheless, if you possess a Self-Managed Super Fund then you may find some concerns because there are a number of things you can not do whilst insolvent surrounding the management of finances.

This is actually an increasing concern with a number of Australians in the last few years; the ATO tells us it has grown Australia-wide from 758,589 in 2009 to 1,011,689 in 2014. So what happens to these Superfunds when it comes down to Bankruptcy?

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As I suggested earlier, a basic option to your SMSF issue is to put your super back into a normal regulated managed fund prior to insolvency and save yourself all the problems described above.

First and foremost, if you are taking into consideration Bankruptcy, you can not be a part of a SMSF. Why? Considering that if you are confronting insolvency, you will be grouped as a ‘disqualified person’. And a disqualified individual can not operate as an Individual Trustee. This leads to a challenge because normally most of the SMSFs are just 2 people, which means the two of these members must also be the individual trustees. The position of trustee sets a lot of legal rules, and if you are in this position I would strongly advise you to become familiar with them all– as an example because you can not ‘know or suspect’ that one of you are bankrupt. So you can notice how an individual insolvency can be rather harmful to a SMSF and as you can picture the procedure of Bankruptcy for a SMSF is rather convoluted.

Irrespective if you phone us or somebody else it does not matter, just please do not walk into insolvency blind when it concerns your SMSF. In reality because Bankruptcy is so complicated with SMSFs we urge you to get both legal and financial advice before proceeding with any one of the steps suggested within this short article.

So what takes place if one of the members of an SMSF does enter Bankruptcy?

For starters, the SMSF will want to be reorganized. This means that you will want to consider your entire structure and make certain it is satisfying the basic requirements, incorporating aspects like having a new trustee that is not dealing with problems with Bankruptcy. The Australian Tax office will provide you a 6 month ‘grace period’ to get this done before you face punishments. And take into consideration, sometimes the most ideal plan would be to just roll the fund into an industry or corporate fund.

Beyond these large-scale restructuring matters, there is a huge amount of paperwork to take care of too, and you have to be continuously keeping the ATO notified of what is occurring. This suggests you need to let them know that you have a bankruptcy problem with your current trustee, that they are being eliminated as soon as possible and let them know who the new trustee/director is. The Insolvent will likewise need to update the ATO using the form NAT 3036 (Found on the ATO website) and they will need to also notify ASIC of their resignation.

In the course of that 6 month time frame you will have to remove the Bankrupt from the SMSF– including their property and assets. Just remember if you are not sure call Bankruptcy Experts Gympie for some free recommendations on 1300 795 575.

What happens if I use a single member fund?

However, if you are a single member fund the Bankruptcy will certainly be a bit varied because you will need to appoint a new director (because it can not be you from now on) you are going to need to make a lot of challenging decisions with this so consulting with a professional is going to be very important. You can contact Bankruptcy Experts Gympie for some free advice on 1300 795 575.

From that you can discover how when it comes to Bankruptcy, although one single member is taking care of issues, it can impact the very existence of an SMSF. If you are at this moment facing this matter yourself, or with a partner in a SMSF, feel free to seek financial advice to make sure you are satisfying the ATO requirements.

Bankruptcy is never uncomplicated, but getting appropriate suggestions is the most effective initial step. If you wish to discuss your approaches further, contact us at Bankruptcy Experts Gympie or visit our website: or just call us on 1300 795 575.