When it comes to Bankruptcy Darwin, usually people
aren't aware that there can be both voluntary, and involuntary bankruptcy -
each have unique approaches and rules.
Involuntary
bankruptcy happens when a person 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 asks the court to issue a sequestration order that declares
you bankrupt. A trustee is assigned, and then you have 14 days to get the
documents in then afterwards you are bankrupt.
You can object
to a bankruptcy notice by going to court right 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 difference between
Involuntary Bankruptcy and or Voluntary Bankruptcy - once you are declared
bankrupt, they're conducted 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 likely to be made
bankrupt by someone, get some help and act on that advice. Generally I've found
it's always better to know what you can and can't do before you have somebody
bankrupt you. Once you are bankrupt, it's usually too late.
Voluntary Bankruptcy
Alternatively,
when it comes to Bankruptcy, sometimes there are times 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 everyone of course, but basically I find that one way you
could work it out is to figure out 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 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 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 have to approach Bankruptcy.
In many ways,
the ease with which companies/credit providers can default your credit file is
unjustifiable. The punishment doesn't seem to amount 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 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 stated
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 go
over their financial situation and Bankruptcy. The other side of crime and
punishment equation is bankruptcy, and in this specific country the provisions
are very generous: you can go bankrupt owing millions of dollars and after 3
years it's all finished with no strings attached. Compared with countries like
the United States, our bankruptcy laws are really 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 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 this and Bankruptcy in general but the purpose of
this blog was to help you decide between a few readily available options. When
getting some advice, bear in mind that there are always alternatives when it
involves Bankruptcy in Darwin, so do some groundwork, and Good luck!
If you would
like to learn more about exactly what to do, where to turn and what questions
to ask about Bankruptcy, then feel free to consult with Bankruptcy Advice
Darwin on 1300 879 867, or visit our website: bankruptcy-advice.com.au/Darwin .