When it comes to
Bankruptcy Port Macquarie, often
people aren't aware that there can be both voluntary, and involuntary
bankruptcy - both of these have distinct methods and rules.
Involuntary
bankruptcy happens when somebody you owe money to applies to the court to
declare you bankrupt. Generally when you get one of these particular notices,
you have actually 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 documentation in then afterwards you are bankrupt.
You can contest
a bankruptcy notice by going to court after the 21 days have expired and put
your case forward, to stop it going to the next level. Other than the way you
became bankrupt there is in fact no difference between Involuntary Bankruptcy
and or Voluntary Bankruptcy - once you are simply 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 likely to be made bankrupt by
someone, get some guidance 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 generally far too late.
Voluntary Bankruptcy
On the other
hand, when it comes to Bankruptcy, sometimes there are times that it is the
best option. So you may need to ask yourself, 'when should I consider voluntary
Bankruptcy?'.
This question is
not the same for every person of course, but generally 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 off 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 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 need to approach Bankruptcy.
In many ways,
the ease with which companies/credit providers can default your credit file is
not fair. The punishment doesn't seem to equate to the crime in my book. So if
you already have defaults on your credit report for 5 years, remember that
bankruptcy is on your credit file for a total 7 years then its wiped off
completely.
So if your
credit rating is a big element 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 contrast is that
with a DA or PIA you repay the money and still 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
talk about 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 extremely 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 assumes 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 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 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 possible options.
When getting some advice, always remember that there are always choices when it
relates to Bankruptcy in Port Macquarie, so do some study, and Good luck!
If you wish to
find out more about what to do, where to turn and what questions to ask about Bankruptcy,
then don't hesitate to reach out to Bankruptcy Experts Port Macquarie on 1300
795 575, or visit our website: bankruptcyexpertsPortmacquarie.com.au.