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Bankruptcy Assistance
Bankruptcy provides a way for debts to be extinguished, allowing you to get on with your life.
It is a way to legally declare that you can't pay your existing debt and lasts for three years.
You are still able to earn an income and own a car.
If you are in debt and are considering bankruptcy think before you act - bankruptcy is a last resort and has serious consequences but for many people it is the best option.
Find out more about Bankruptcy below:
Do I Need to Become Bankrupt?
Bankruptcy may seem an easy and attractive option if you want to deal quickly with your creditors. However it has consequences which you should know about before you consider taking this step.
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How do I Become a Bankrupt?
When you feel unable to pay your debts and you cannot come to a satisfactory arrangement with your creditors then bankruptcy may be your best option. You may voluntarily lodge a debtor's petition to become bankrupt.
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Is there a Minimum Amount I Need to Owe Before I can go Bankrupt?
No. You can become bankrupt voluntarily owing any amount. A creditor however, cannot make you bankrupt unless the debt you owe is $5,000 or more.
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What Happens When I Become a Bankrupt?
Once you are a bankrupt your unsecured creditors will cease to contact you.
If you want this to happen then you must list all your unsecured creditors in your Statement of Affairs.
This will also include debts which you have taken out with another person (joint debts) and even money you may owe to your family and friends.
Most legal action that an unsecured creditor had taken against you, must stop once you file for bankruptcy.
This also applies to a garnishee from your income or bank account, or any recovery action by a sheriff or bailiff.
If any of your unsecured creditors that continue to contact you, then you should notify your trustee - they will contact the creditor.
There are some debts which you must continue to pay during bankruptcy and these include:
- Penalties and fines imposed by the court
- Unliquidated damages from accidents e.g. car accidents may be an exemption
- Student assistance/supplement loans and HELP debts
Of course you must continue to pay certain debts such as your utility bills and any additional debts you incur after your bankruptcy commences.
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What if my House is Mortgaged?
Your trustee has to deal with any equity or interest you have in a property for the benefit of your creditors.
This may mean that the property has to be sold.
If the property is jointly owned, the trustee may consider selling his interest in your property to a non-bankrupt joint owner.
Alternatively the joint owner, provided they are not bankrupt, may make an offer to purchase the trustees interest in the property.
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What if I Have a Car?
Once you become bankrupt, a vehicle which is used primarily as a means of transport (eg. car or motor bike), where your interest in the vehicle is less than a prescribed amount (indexed), is protected and can be retained by you.
Where the interest in the vehicle is valued at more than the prescribed amount, the trustee is required to sell the vehicle and give back to you the value of the prescribed amount and retain the balance for your creditors.
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What About Debts Incurred Just before Bankruptcy?
If you are already insolvent, that is you cannot pay your debts, you should not incur further credit because if you become bankrupt it may be an offence under the Bankruptcy Act, and you may be prosecuted.
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What Happens to a Debt I Forgot About at the Time of Becoming Bankrupt?
If you forgot about a debt and remember it later, you should contact your trustee as soon as possible so that it may be added to your list of creditors.
Failure to disclose debts could extend your bankruptcy to 5 years.
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Smart Link Finance are specialists in this industry with over 15 years experience - act now - we are only a phone call away.
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