When it involves Bankruptcy, there are 2 sorts of people– people who have chosen to declare bankruptcy and those declared insolvent by others (Their creditors).
When it comes to Bankruptcy in Australia, typically individuals aren’t aware that there could be both voluntary, and involuntary bankruptcy– and this is important because sometimes people don’t become aware that others can declare them bankrupt– and also if this develops you have particular rights and’ responsibilities attached.
Involuntary bankruptcy happens when a person you owe money to involves the court to declare you bankrupt. This will result in you being given with a notice that, typically when you get one of these kinds of notices, you have 21 days to pay all the financial debt. If you don’t, then the lender goes back to the court and asks the court to supply a sequestration order that proclaims you bankrupt. During this time you will have a brief window in which you can dispute and put your case forward as to exactly why it should not progress to the next degree and why you should not be declared bankrupt. But once the determination has been made, you will be bankrupt and experiencing the same procedures as individuals who took that path voluntarily.
Having said that, when it concerns Bankruptcy you can imagine that the involuntary process is full of even more stress, worry and fear as other people are taking control of your life. My most important suggestion with Bankruptcy and involuntary bankruptcy is that if you believe that it might take place, get expert recommendations on bankruptcy as early as possible, even if you are just worried about bills and fear that it might continue to escalate. I am sure that you can visualize that it is better to recognize what you can and can’t do before getting forced into that circumstance. Once you are insolvent, it’s usually far too late to take steps.
Well if you have been declared insolvent, you won’t really have many options but to move through the experience and you will certainly want to get specialist recommendations to make sure you are declaring correctly, not breaking any guidelines, and will have the bankruptcy discharged as early as possible.
The bright side is that in Australia the arrangements for bankruptcy are really quite generous: you could 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 insolvency laws are quite good.
I don’t pretend to know why that is, but a couple of hundred years ago debtors went to jail. In these times I presume the government thinks that the quicker it can get you back on your feet working and paying income taxes, the better. It makes more sense than locking you up which costs the taxpayer in any case.
Going bankrupt will wipe away the huge majority of your several financial obligations, (including tax debts to the ATO) but always remember the few exemptions- the primary ones being Centrelink Debts, Court Fines like parking and speeding fines, HECS or Fee Help loans, and money to pay for a car accident if the car was not covered.
There is a lot more that could be said about this and Bankruptcy as a whole so if getting some recommendations, bear in mind that there are always options when it includes Bankruptcy in Australia, so do some research, and good luck!
If you wish to learn more about exactly what to do, where to turn and what inquiries to ask about Bankruptcy, then don’t hesitate to get in contact with Bankruptcy Experts on 1300 795 575, or visit our website: www.bankruptcyexpertssydney.com.au.