Dealing With Bankruptcy
Bankruptcy is a formal process of dealing with unmanageable debt. Hence, bankruptcy is a legal process where you are declared unable to pay your debts. Consequently, a trustee is appointed to manage your affairs. Accordingly, a trustee will assess what debts can be released; plus debt collectors cannot contact you.
- Firstly, it lasts for three years. Then, stays on your credit report for two further years after finalising or two years from the end date; whichever is the higher.
- Secondly, it prevents you from borrowing money.
- Thirdly, you are unable to be a director of a company during this time.
- Plus your assets may be sold including your home to pay your creditors.
- Also, it may affect your ability to work in your chosen profession.
- Finally, you may be able to travel overseas.
There are several ways of entering bankruptcy. However, you would be informed of a creditors intention for bankruptcy proceedings via a bankruptcy notice. Consequently, giving you time to respond to the announcement. Certainly, in due course lodging a debtor (you) to the federal circuit court as a bankrupt.
However, who can issue an insolvency notice or creditors petition?
- Australian Tax Office as a way to collect on outstanding taxes owed.
- Any of your creditors for non-payment or breach of contract to recover monies. However, there are specific policies they must adhere to under a court proceeding.
Bankruptcy and your Assets
Bankruptcy and your Income
Bankruptcy and Work Restrictions
What are the various Bankruptcy Solutions?
There are several clauses under the Bankruptcy Act 1966 to assist in supporting a range of personal insolvency.
- Initially, Part 9 Debt Agreements - part 9 debt agreements are a way to avoid full bankruptcy.
- Secondly, Part 10 Insolvency Agreements.
- Finally, a full personal bankruptcy issued under the bankruptcy act of 1966.
Australian financial security authority (AFSA) administers legal insolvency matters. However, there are precise thresholds and policies related to each insolvency noted above. Consequently, you should speak to a financial counsellor if you owe money and considering applying for bankruptcy. Also, many services are offering free legal advice on debt and financial issues.
Your individual financial and personal situation will determine the most suitable insolvency solution.
Alternatives to a Bankruptcy
The alternatives to insolvency you may consider could be:
- Firstly, an informal arrangement with creditors.
- Then, formalised arrangement with creditors - Part 9 Debt Agreement.
- Otherwise, formalising a debt arrangement with creditors. Hence, one option would include a Part 10 Insolvency (PIA).
- Finally, Debt Consolidation may be an option to combine all of your debts into a single loan.
These are also services we can provide to our clients to assist in avoiding bankruptcy.
Contact Loan Saver Network on 1300 796 850 today.
Annulment of a Bankruptcy
Annulment is a process where the bankruptcy is removed entirely from insolvency records. As such, the term bankruptcy is currently for three years. However, a bankruptcy annulment would cancel the bankruptcy; and thus be removed from all insolvency databases.
While bankrupt, you can:
- You may pay the debt in full & annul the bankruptcy. Annulment removes it entirely from your records.
- Otherwise, refinance a home loan and pay out the monies owed by the bankrupt. However, there would need to be a title change as lenders won't lend to a person while bankrupt.
- Plus, an equity buyback - buy back property equity via ongoing payments to a trustee over time.
If you are worried about debt, let's start a discussion about your tailored solution.
Contact us today for a Free Debt Assessment Consultation on 1300 796 850 or submit an enquiry below.