When it comes to
Bankruptcy Melbourne, normally
people aren't aware that there can be both voluntary, and involuntary
bankruptcy - both have different approaches and policies.
Involuntary bankruptcy
happens when someone you owe money to applies to the court to declare you
bankrupt. Normally when you get one of these notices, you have normally 21 days
to pay all the debt. If you don't, then the creditor goes back to the court and
requests the court to issue a sequestration order that declares you bankrupt. A
trustee is selected, and then you have 14 days to get the documents in then
afterwards you are bankrupt.
You can contest
a bankruptcy notice by going to court right after 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 distinction between Involuntary
Bankruptcy and or Voluntary Bankruptcy - once you are simply declared bankrupt,
they're conducted to in the very 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 better to know what you can and can't do before you have a person
bankrupt you. Once you are bankrupt, it's typically far too late.
Voluntary Bankruptcy
Alternatively,
when it comes to Bankruptcy, sometimes there are moments that it is the most
ideal option. So you may need to ask yourself, 'when should I consider
voluntary Bankruptcy?'.
This question is
not the very same for each person of course, but ordinarily I find that one way
you could work it out is to figure out just how long it will take you to pay
each 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
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 fail to remember
to pay your $30 phone bill for 6 months more, it's very likely the telephone
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 truly 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
unreasonable. The punishment doesn't seem to equal the crime in my book. So if
you currently 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 erased
completely.
So if your
credit rating is a big factor 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 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 part 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 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 to countries like the United
States, our bankruptcy laws are very generous.
I don't claim to
know why that is but a few hundred years ago debtors went to prison. These days
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 in turn costs the taxpayer anyway.
Bankruptcy wipes
every one of 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 a lot
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, remember that there are always alternatives when it
concerns Bankruptcy in Melbourne, so do some study, and Good luck!
If you want to
learn more about precisely what to do, where to turn and what questions to ask
about Bankruptcy, then feel free to contact Bankruptcy Advice Melbourne on 1300
879 867, or visit our website: bankruptcy-advice.com.au/Melbourne.
