When it comes to
Bankruptcy Cairns, quite often
people aren't aware that there can be both voluntary, and involuntary
bankruptcy - both have distinct methods and guidelines.
Involuntary bankruptcy
happens when someone you owe money to involves the court to declare you
bankrupt. Typically when you get one of those notices, you have actually 21
days to pay all the debt. If you don't, then the creditor returns 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 documents
in and afterwards you are bankrupt.
You can
challenge a bankruptcy notice by going to court right after the 21 days have expired
and put your case forward, to avoid 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 overseen to in the 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 help 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 somebody bankrupt you. Once you are bankrupt, it's generally too late.
Voluntary Bankruptcy
Alternatively,
when it comes to Bankruptcy, sometimes there are moments that it is the most
ideal option. So you may want to ask yourself, 'when should I consider
voluntary Bankruptcy?'.
This question is
not the very same for everybody of course, but generally I find that one way
you could work it out is to figure out just 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 assist 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 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 overlook
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 truly 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
unscrupulous. The punishment doesn't seem to equal the crime in my book. So if
you actually 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 detail 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 pay back 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 more people are afraid of when they come to me to
review 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 over with no strings attached. As 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 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
every one 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 take care of a car
accident if the car was not actually insured.
There is a lot
more that can be said about 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, keep in mind that there are always possibilities when it comes to Bankruptcy
in Cairns, so do some legwork, and Good luck!
If you want to
find out more about what to do, where to turn and what questions to ask about Bankruptcy,
then feel free to reach out to Bankruptcy Experts Cairns on 1300 795 575, or
visit our website:bankruptcyexpertsCairns.com.au.