Bankruptcy in Bundaberg - does it matter if it is voluntary?

When it comes to Bankruptcy Bundaberg, generally people aren't aware that there may be both voluntary, and involuntary bankruptcy - both have different methods and rules.

Involuntary bankruptcy arises when someone you owe money to applies to the court to declare you bankrupt. Commonly when you get one of those notices, you have normally 21 days to pay all the debt. If you don't, then the creditor returns to the court and requests the court to provide a sequestration order that declares you bankrupt. A trustee is appointed, and then you have 14 days to get the documentation in and afterwards you are bankrupt.

You can challenge a bankruptcy notice by going to court right after the 21 days have expired and put your case forward, to avoid it going to the next level. Other than the way you became bankrupt there is in reality no distinction between Involuntary Bankruptcy and or Voluntary Bankruptcy - once you are declared bankrupt, they're overseen to in the exact same way.

However, when it concerns 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 suggestions 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 a person bankrupt you. Once you are bankrupt, it's typically too late.

Voluntary Bankruptcy

However, when it comes to Bankruptcy, sometimes there are moments that it is the most effective option. So you may need to ask yourself, 'when should I consider voluntary Bankruptcy?'.

This question is not the very same for everyone of course, but usually 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 help you make that decision, and help you to understand Bankruptcy.

Once, I had an 80 year old pensioner, who spoke 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 really 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 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 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 unjust. The punishment doesn't seem to amount to the crime in my book. So if you actually have defaults on your credit report for 5 years, bear 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 aspect 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 contrast is that with a DA or PIA you pay back 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 more 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 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 very generous.

I don't pretend to know why that is but a few 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 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 much more that can be said about 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, remember that there are always alternatives when it involves Bankruptcy in Bundaberg, so do some homework, and Good luck!

If you want to learn more about just what to do, where to turn and what questions to ask about Bankruptcy, then don't hesitate to check with Bankruptcy Experts Bundaberg on 1300 795 575, or visit our website: bankruptcyexpertsBundaberg.com.au.