When it comes to
Bankruptcy Adelaide, normally people
aren't aware that there can be both voluntary, and involuntary bankruptcy - the
two have distinct approaches and guidelines.
Involuntary bankruptcy
occurs when a person you owe money to involves the court to declare you
bankrupt. Typically when you get one of these kinds of 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
documents in and then you are bankrupt.
You can contest
a bankruptcy notice by going to court following the 21 days have expired and
put your case forward, to prevent it going to the next level. Other than the
way you became bankrupt there is in reality no distinction between Involuntary
Bankruptcy and or Voluntary Bankruptcy - once you are declared bankrupt,
they're overseen to in the same way.
However, when it
concerns Bankruptcy for this, the stress, torment and fear that accompanies
this process is incredible. If you think you are prone to be made bankrupt by
someone, get some suggestions and act on that advice. Generally I've found it's
always better to know what you can and can't do before you have someone
bankrupt you. Once you are bankrupt, it's normally far too late.
Voluntary Bankruptcy
However, when it
comes to Bankruptcy, sometimes there are moments that it is the most effective
option. So you may want to ask yourself, 'when should I consider voluntary
Bankruptcy?'.
This question is
not the very same for every person of course, but basically I find that one way
you could work it out is to figure out how long it will take you to pay all of
your debts - if its longer than 3 years (the period you are declared bankrupt),
then this may really 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
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 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 remain 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 impact how you need to
approach Bankruptcy.
In many ways,
the ease with which companies/credit providers can default your credit file is
unjustifiable. 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, keep in mind that
bankruptcy is on your credit file for a total 7 years then its erased
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 change is that with
a DA or PIA you repay the money and nevertheless have it on your file for 7
years.
Bankruptcy
I have stated
the word a few times now, but when it comes down to it, Bankruptcy is the
biggest part, and the element 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
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 with
countries like the United States, our bankruptcy laws are quite good.
I don't pretend
to know why that is but a couple of hundred years ago debtors went to prison.
These days I suppose the government finds that 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 insured.
There is much
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 possible options. When getting
some advice, keep in mind that there are always choices when it involves Bankruptcy
in Adelaide, so do some groundwork, and Good luck!
If you wish to
find out 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 Experts
Adelaide on 1300 795 575, or visit our website:bankruptcyexpertsAdelaide.com.au.
