When it comes to
Bankruptcy Perth, often people
aren't aware that there may be both voluntary, and involuntary bankruptcy - the
two have distinct methods and guidelines.
Involuntary
bankruptcy takes place when a person you owe money to involves the court to
declare you bankrupt. Normally when you get one of these kinds of 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
documentation in then afterwards you are bankrupt.
You can
challenge a bankruptcy notice by going to court following 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 very 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 more than likely to
be made bankrupt by someone, get some guidance 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 somebody bankrupt you. Once you are bankrupt, it's generally
too late.
Voluntary Bankruptcy
Nevertheless,
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 everybody of course, but ordinarily 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
rate 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 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 sit on your file for 5 years,
so for $30 you can have your credit file very seriously damaged for that period
of time - and all of this will impact how you need to approach Bankruptcy.
In many ways,
the ease with which companies/credit providers can default your credit file is
not fair. 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, keep 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 take part 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 variation
is that with a DA or PIA you repay 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 element more people are afraid of when they come to me to
review 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. Compared to countries like the United
States, our bankruptcy laws are quite reasonable.
I don't pretend
to know why that is but a couple of hundred years ago debtors went to prison.
Nowadays I suppose the government thinks 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 insured.
There is much
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, bear in mind that there are always alternatives when
it concerns Bankruptcy in Perth, so do some research, and Good luck!
If you wish to
find out more about precisely what to do, where to turn and what questions to
ask about Bankruptcy, then feel free to talk to Bankruptcy Advice Perth on 1300
879 867, or visit our website:bankruptcy-advice.com.au/Perth.
