When it comes to
Bankruptcy Hobart, typically people
aren't aware that there can be both voluntary, and involuntary bankruptcy - the
two have unique approaches and guidelines.
Involuntary bankruptcy
arises when somebody you owe money to involves the court to declare you
bankrupt. Typically when you get one of those notices, you have 21 days to pay
all the debt. If you do not, then the creditor goes back to the court and asks
the court to provide a sequestration order that declares you bankrupt. A
trustee is assigned, and then you have 14 days to get the documentation in and
then you are bankrupt.
You can
challenge a bankruptcy notice by going to court shortly after the 21 days have
expired and put your case forward, to stop it going to the next level. Apart
from the way you became bankrupt there is in fact no difference between
Involuntary Bankruptcy and or Voluntary Bankruptcy - once you are simply
declared bankrupt, they're conducted to in the same way.
However, when it
comes to Bankruptcy for this, the stress, torment and fear that accompanies
this process 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 someone
else bankrupt you. Once you are bankrupt, it's normally too late.
Voluntary Bankruptcy
Alternatively,
when it comes to Bankruptcy, sometimes there are times that it is the best
option. So you may want 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 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 really 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 forget 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 sit 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 equate to the crime in my book. So
if you already 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 issue 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 repay the money and still 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
discuss 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 with 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 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 costs the taxpayer anyway.
Bankruptcy wipes
every one 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 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, bear in mind that there are always options when it involves Bankruptcy
in Hobart, so do some investigation, and Good luck!
If you would
like to learn more about what to do, where to turn and what questions to ask
about Bankruptcy, then don't hesitate to contact Bankruptcy Advice Hobart on
1300 879 867, or visit our website:bankruptcy-advice.com.au/Hobart .
