When it comes to
Bankruptcy Gladstone, often people
aren't aware that there can be both voluntary, and involuntary bankruptcy -
both have different approaches and policies.
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 types of notices, you have actually
21 days to pay all the debt. If you do not, then the creditor returns to the
court and requests the court to provide a sequestration order that declares you
bankrupt. A trustee is assigned, and then you have 14 days to get the documents
in and then you are bankrupt.
You can contest
a bankruptcy notice by going to court following the 21 days have expired and
put your case forward, to stop it going to the next level. Other than the way
you became bankrupt there is in fact no difference between Involuntary
Bankruptcy and or Voluntary Bankruptcy - once you are declared bankrupt,
they're conducted 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 guidance 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 normally far too late.
Voluntary
Bankruptcy
Alternatively,
when it comes to Bankruptcy, sometimes there are times that it is the best
option. So you may need 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 serve to 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 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 service will
default your credit file. That default will remain on your file for 5 years, so
for $30 you can have your credit file truly 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 equal 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 erased
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 change 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 stated
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
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 over with no strings attached. As compared to countries like the
United States, our bankruptcy laws are very 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 believes 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 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 available options.
When getting some advice, always remember that there are always possibilities
when it relates to Bankruptcy in Gladstone, so do some investigation, and Good
luck!
If you want to
find out more about exactly what to do, where to turn and what questions to ask
about Bankruptcy, then feel free to speak to Bankruptcy Experts Gladstone on
1300 795 575, or visit our website: bankruptcyexpertsGladstone.com.au.