Bankruptcy in Brisbane - does it matter if it is voluntary?

When it comes to Bankruptcy Brisbane, often people aren't aware that there are both voluntary, and involuntary bankruptcy - the two have distinct approaches and policies.

Involuntary bankruptcy takes place when someone you owe money to applies to the court to declare you bankrupt. Typically when you get one of these types of 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 provide a sequestration order that declares you bankrupt. A trustee is appointed, and then you have 14 days to get the documentation in and after that you are bankrupt.

You can challenge a bankruptcy notice by going to court 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 reality no distinction between Involuntary Bankruptcy and or Voluntary Bankruptcy - once you are simply declared bankrupt, they're administered to in the very 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 likely 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 an individual bankrupt you. Once you are bankrupt, it's normally too late.

Voluntary Bankruptcy

However, when it comes to Bankruptcy, sometimes there are moments that it is the most effective option. So you may want to ask yourself, 'when should I consider voluntary Bankruptcy?'.

This question is not the same for everybody of course, but generally I find that one way you could work it out is to figure out just how long it will take you to pay all 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 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 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 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 unethical. 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, bear in mind 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 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 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 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 quite reasonable.

I don't claim to know why that is but a few hundred years ago debtors went to prison. Nowadays 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 in turn 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 take care of a car accident if the car was not 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 possible options. When getting some advice, always remember that there are always choices when it comes to Bankruptcy in Brisbane, so do some investigation, and Good luck!

If you wish to find out more about exactly what to do, where to turn and what questions to ask about Bankruptcy, then feel free to contact Bankruptcy Experts Brisbane on 1300 795 575, or visit our website: bankruptcyexpertsBrisbane.com.au.