When it comes to
Bankruptcy Sydney, quite often
people aren't aware that there may be both voluntary, and involuntary
bankruptcy - both of these have different approaches and policies.
Involuntary
bankruptcy occurs when a person you owe money to applies to the court to
declare you bankrupt. Normally when you get one of these 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 documentation in then afterwards you are bankrupt.
You can object
to a bankruptcy notice by going to court after the 21 days have expired and put
your case forward, to stop 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 declared bankrupt, they're overseen
to in the exact same way.
However, when it
concerns Bankruptcy for this, the stress and anxiety, 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 suggestions and act on that advice.
Generally I've found it's always more effective to know what you can and can't
do before you have someone else bankrupt you. Once you are bankrupt, it's
normally far too late.
Voluntary Bankruptcy
On the other
hand, when it comes to Bankruptcy, sometimes there are times that it is the
most ideal option. So you may have to ask yourself, 'when should I consider
voluntary Bankruptcy?'.
This question is
not the very same for each person of course, but more often than not I find
that one way you could work it out is to figure out just how long it will take
you to pay every one of your debts - if its longer than 3 years (the period you
are declared bankrupt), then this may 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 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 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 impact how you need to approach Bankruptcy.
In many ways,
the ease with which companies/credit providers can default your credit file is
unjust. 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, 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 element 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 nevertheless 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 part more people are afraid of when they come to me to discuss
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. As compared to countries like
the United States, our bankruptcy laws are very 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 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 pay for a car accident
if the car was not actually insured.
There is a lot
more that can be said about doing 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, always remember that there are always
possibilities when it relates to Bankruptcy in Sydney, so do some research, and
Good luck!
If you want to
learn more about what to do, where to turn and what questions to ask about Bankruptcy,
then feel free to talk to Bankruptcy Advice Sydney on 1300 879 867, or visit
our website: bankruptcy-advice.com.au/Sydney .