When it comes to
Bankruptcy Darwin, usually people
aren't aware that there can be both voluntary, and involuntary bankruptcy - the
two have distinct approaches and guidelines.
Involuntary bankruptcy
happens when someone you owe money to applies to the court to declare you
bankrupt. Commonly when you get one of those notices, you have 21 days to pay
all the debt. If you do not, then the creditor returns to the court and
requests the court to issue a sequestration order that declares you bankrupt. A
trustee is assigned, and then you have 14 days to get the documentation in and
after that 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 prevent it going to the next level. Apart from the way
you became bankrupt there is in reality no distinction between Involuntary
Bankruptcy and or Voluntary Bankruptcy - once you are simply declared bankrupt,
they're managed to in the same way.
However, when it
comes to Bankruptcy for this, the stress, torment and fear that accompanies
this method is incredible. If you think you are in all likelihood to be made
bankrupt by someone, get some assistance 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
a person bankrupt you. Once you are bankrupt, it's usually too late.
Voluntary Bankruptcy
Nevertheless,
when it comes to Bankruptcy, sometimes there are times that it is the best
option. So you may want to ask yourself, 'when should I consider voluntary
Bankruptcy?'.
This question is
not the very same for every person of course, but more often than not I find
that one way you could work it out is to figure out just how long it will take
you to pay every one 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
rate 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 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 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
unscrupulous. The punishment doesn't seem to match 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 rubbed out
completely.
So if your
credit rating is a big element 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 difference
is that with a DA or PIA you repay the money and nevertheless 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
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 extremely reasonable.
I don't pretend
to know why that is but a few hundred years ago debtors went to prison. These
days 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 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 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 possible options.
When getting some advice, always remember that there are always alternatives
when it concerns Bankruptcy in Darwin, so do some study, 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 speak with Bankruptcy Experts Darwin on 1300 795 575, or
visit our website:bankruptcyexpertsDarwin.com.au.
