When it comes to
Bankruptcy Canberra, often people
aren't aware that there may be both voluntary, and involuntary bankruptcy -
both of these have different methods and guidelines.
Involuntary bankruptcy
arises when someone you owe money to applies to the court to declare you
bankrupt. Generally when you get one of these particular notices, you have 21
days to pay all the debt. If you don't, then the creditor goes back to the
court and asks the court to provide a sequestration order that declares you
bankrupt. A trustee is appointed, and then you have 14 days to get the
paperwork in and after that you are bankrupt.
You can contest
a bankruptcy notice by going to court immediately 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 difference between
Involuntary Bankruptcy and or Voluntary Bankruptcy - once you are declared
bankrupt, they're conducted to in the very same way.
However, when it
concerns Bankruptcy for this, the stress, torment and fear that accompanies
this method is incredible. If you think you are in all likelihood to be made
bankrupt by someone, get some tips 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 an
individual bankrupt you. Once you are bankrupt, it's normally far too late.
Voluntary Bankruptcy
Alternatively,
when it comes to Bankruptcy, sometimes there are moments that it is the best
option. So you may want to ask yourself, 'when should I consider voluntary
Bankruptcy?'.
This question is
not the same for everybody of course, but normally I find that one way you
could work it out is to figure out just 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 assist 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 remain 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 have to approach Bankruptcy.
In many ways,
the ease with which companies/credit providers can default your credit file is
vicious. The punishment doesn't seem to amount to the crime in my book. So if
you currently 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 aspect in trying to decide whether to take part 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 difference
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 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 specific country the
arrangements 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 quite generous.
I don't claim to
know why that is but a few hundred years ago debtors went to prison. Nowadays I
suppose the government believes 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 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 pay for a car accident
if the car was not insured.
There is far
more that can be said about 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 options when it
relates to Bankruptcy in Canberra, so do some study, and Good luck!
If you would
like to learn more about exactly what to do, where to turn and what questions
to ask about Bankruptcy, then don't hesitate to get in touch with Bankruptcy
Advice Canberra on 1300 879 867, or visit our website:bankruptcy-advice.com.au/Canberra
.
