When it comes toBankruptcy Sydney, often people
aren't aware that there may be both voluntary, and involuntary bankruptcy -
both of these have distinct methods and policies.
Involuntary bankruptcy
arises when somebody you owe money to involves the court to declare you
bankrupt. Normally when you get one of these kinds of notices, you have 21 days
to pay all the debt. If you do not, then the creditor returns to the court and
asks the court to provide a sequestration order that declares you bankrupt. A
trustee is selected, and then you have 14 days to get the documentation in and
then you are bankrupt.
You can
challenge a bankruptcy notice by going to court shortly after the 21 days have
expired and put your case forward, to avoid it going to the next level. Other
than 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 conducted to in the same way.
However, when it
comes to Bankruptcy for this, the stress and anxiety, torment and fear that
accompanies this process is incredible. If you think you are more than likely
to be made bankrupt by someone, get some suggestions and act on that advice.
Generally I've found it's always more ideal to know what you can and can't do
before you have someone bankrupt you. Once you are bankrupt, it's usually far
too late.
Voluntary Bankruptcy
On the other
hand, when it comes to Bankruptcy, sometimes there are times that it is the
best option. So you may have to ask yourself, 'when should I consider voluntary
Bankruptcy?'.
This question is
not the very same for everybody of course, but typically I find that one way
you could work it out is to figure out how long it will take you to pay each
one 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 spoke 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 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 very seriously 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
not fair. The punishment doesn't seem to equate to the crime in my book. So if
you currently have defaults on your credit report for 5 years, keep in mind
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 aspect in trying to decide whether to enter into 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 repay the money and still 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 most 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 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 to countries like the United
States, our bankruptcy laws are really generous.
I don't pretend
to know why that is but a few hundred years ago debtors went to prison.
Nowadays 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 in turn 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 insured.
There is far
more that can be said about doing this and Bankruptcy in general but the
purpose of this blog was to help you decide between a few possible options.
When getting some advice, bear in mind that there are always alternatives when
it involves Bankruptcy in Sydney, so do some legwork, and Good luck!
If you would
like to find out more about just what to do, where to turn and what questions
to ask about Bankruptcy, then don't hesitate to speak with Fresh Start
Solutions Sydney on 1300 818 575, or visit our website: freshstartsolutions.com.au/bankruptcy-Sydney
