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. Hence, a trustee will assess what debts can be released; plus debt collectors cannot contact you.

  • Firstly, lasts for a period of three years. Then, stays on your credit report for 2 further years after finalising or 2 years from the end date; whichever is the greater.
  • Secondly, prevents you from borrowing money.
  • Thirdly, you are unable to be a director of a company during this time.
  • Plus you assets maybe 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.

You may be forced into a bankruptcy in a number of ways. However, you would be notified via a bankruptcy notice giving you time to respond. Then 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? 

 

What are the various Bankruptcy Solutions?

There are a number of 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.
  • Finally, Full bankruptcy.

All forms of legal insolvency are administered by the australian financial security authority (AFSA). However, there are very specific thresholds and policies related to each insolvency noted above. Consequently, you should speak to a financial counsellor if you owe money and considering to apply for bankruptcy. Also, there are also many services 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, informal arrangement with creditors.
  • Then, formalised arrangement with creditors - Part 9 Debt Agreement.
  • Otherwise, formalised arrangement with creditors - Part 10 Insolvency (PIA).
  • Finally, Debt Consolidation.

These are also services we can provide our clients if they have the ability to avoid bankruptcy.

Contact Loan Saver Network for a free debt consultation on 1300 796 850.

Annulment of a Bankruptcy

Annulment is a process where the bankruptcy is removed entirely from insolvency records. As such, the term of a bankruptcy is currently 3 years. Therefore, an anullment would cancel the term and be removed from all databases.

While bankrupt you can:

  • You may pay the debt in full to annul the bankruptcy. Annullment 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, equity buy back - buy back property equity via ongoing payments to a trustee over time.

If you are stressed out with 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.

Let's talk about a solution that suits you