When it comes to
Bankruptcy Newcastle, usually people
aren't aware that there are both voluntary, and involuntary bankruptcy - both
have unique approaches and guidelines.
Involuntary bankruptcy
occurs when a person you owe money to applies to the court to declare you
bankrupt. Usually when you get one of these particular 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 issue a sequestration order that declares you
bankrupt. A trustee is appointed, and then you have 14 days to get the
documents in and after that 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 fact no distinction between Involuntary
Bankruptcy and or Voluntary Bankruptcy - once you are simply declared bankrupt,
they're administered to in the 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 prone to be made bankrupt by
someone, get some help and act on that advice. Generally I've found it's always
more ideal to know what you can and can't do before you have a person bankrupt
you. Once you are bankrupt, it's usually too late.
Voluntary Bankruptcy
Alternatively,
when it comes to Bankruptcy, sometimes there are moments that it is the best
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 usually I find that one way
you could work it out is to figure out just how long it will take you to pay
each one 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
rate 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 fail to remember
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 remain on your file
for 5 years, so for $30 you can have your credit file seriously 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
unjust. The punishment doesn't seem to equal 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 erased
completely.
So if your
credit rating is a big factor 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 variation is that
with a DA or PIA you repay 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 part 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 to
countries like the United States, our bankruptcy laws are quite reasonable.
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 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 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 pay for a car accident
if the car was not insured.
There is far
more that can be said about doing this and Bankruptcy in general but the
objective of this blog was to help you decide between a few available options.
When getting some advice, bear in mind that there are always possibilities when
it relates to Bankruptcy in Newcastle, so do some homework, and Good luck!
If you want to
learn more about what to do, where to turn and what questions to ask about Bankruptcy,
then don't hesitate to check with Bankruptcy Experts Newcastle on 1300 795 575,
or visit our website:bankruptcyexpertsNewcastle.com.au.
