When it comes to
Bankruptcy Perth, typically people
aren't aware that there can be both voluntary, and involuntary bankruptcy -
both have unique approaches and policies.
Involuntary
bankruptcy takes place when somebody you owe money to applies to the court to
declare you bankrupt. Commonly when you get one of these notices, you have 21
days to pay all the debt. If you do not, then the creditor goes back to the
court and asks the court to provide a sequestration order that declares you
bankrupt. A trustee is assigned, and then you have 14 days to get the paperwork
in and then you are bankrupt.
You can object
to a bankruptcy notice by going to court after the 21 days have expired and put
your case forward, to prevent it going to the next level. Apart from the way
you became bankrupt there is in reality no difference between Involuntary
Bankruptcy and or Voluntary Bankruptcy - once you are declared bankrupt,
they're administered to in the exact same way.
However, when it
comes to Bankruptcy for this, the stress and anxiety, torment and fear that
accompanies this method is incredible. If you think you are prone to be made
bankrupt by someone, get some help and act on that advice. Generally I've found
it's always more effective to know what you can and can't do before you have an
individual bankrupt you. Once you are bankrupt, it's typically 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 have to ask yourself, 'when should I consider voluntary
Bankruptcy?'.
This question is
not the very same for every person of course, but normally I find that one way
you could work it out is to figure out how long it will take you to pay each 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 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 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 phone 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 need to approach Bankruptcy.
In many ways,
the ease with which companies/credit providers can default your credit file is
improper. 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, 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 factor in trying to decide whether to participate 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 variation
is that with a DA or PIA you repay the money and nevertheless 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 part most people are afraid of when they come to me to go
over 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 quite generous.
I don't claim to
know why that is but a couple of hundred years ago debtors went to prison.
Nowadays I suppose the government feels 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 except for 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 doing this and Bankruptcy in general but the
purpose of this blog was to help you decide between a few available options.
When getting some advice, bear in mind that there are always choices when it
involves Bankruptcy in Perth, so do some homework, 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 check with Fresh Start
Solutions Perth on 1300 818 575, or visit our website:freshstartsolutions.com.au/bankruptcy-Perth
