Being declared by a court or stating that you cannot pay your debts is the first step in the formal process known as bankruptcy.
Before considering bankruptcy as your last resort, you must first be aware of the seriousness of this process. While some people in Brisbane may see bankruptcy as the best way to clear off outstanding debts, bankruptcy help Brisbane means talking to a financial counsellor before anything else.
Who are eligible to file for Bankruptcy in Australia?
An Australian “connection” has to be established for you to declare bankruptcy. This means that you either have a business place in Australia or you are an Australian resident. Any debt amount that you are unable to pay allows you to file for bankruptcy.
Steps for Filing for Bankruptcy
You must first consult a financial counsellor before you file for bankruptcy. Doing so ensures you understand the serious consequences a declaration of bankruptcy will bring to you. If you feel that you are ready to face the consequences, here are the steps to apply for bankruptcy:
- A bankruptcy pack from the AFSA or Australian Financial Security Authority should be downloaded online and filled out
- Consult a financial counsellor to help you fill out the forms. He/she will also be able to help you reconsider by making you understand the serious consequences of declaring bankruptcy
- Submit your application either online or mail
AFSA will appoint a trustee 2 weeks after you have been declared bankrupt. Managing your financial affairs can either be an appointed trustee from AFSA or hiring your private trustee.
The serious consequences of Bankruptcy
Applying for voluntary bankruptcy may sound like a relief, but serious consequences are in store for you, to include:
A formal declaration of bankruptcy may protect some of your assets, but it will also affect some of it. Assets that are not protected include:
- At the start of bankruptcy, monies of more than $1,000 in your bank accounts will be confiscated
- Land and houses
- Vehicles priced above the allowed value
- High-end electronic items, antiques, and other expensive and luxurious personal effects
- Trade tools priced above the allowed value
- Jewellery and valuable artworks
- Winnings, inheritance or tax refunds
A declaration of bankruptcy makes it unlawful for you to:
- Do business transactions using a different business name other than your legal name
- Need the court’s permission to manage a business or act as one of a company’s director
Loans and credit
A lifetime public record with the National Personal Insolvency Index and a minimum of five years on your credit report will reflect your bankruptcy. This means that for five years, no credit or financial institutions will loan you money.
Earning an income
You are allowed to earn money with the income not exceeding allowed amounts after-tax. You are required to pay your trustee contributions that will be spread over your creditors.
Fines, HECS, and Child Support
Declaring bankruptcy will not exempt you from paying fines imposed by the court, child support, and Higher Education debts.
Having debts totalling $5,000 and being unable to pay it may make your creditors compel you to file for bankruptcy. If you are wondering where to find bankruptcy help in Brisbane, you need not worry. Companies like NR Consulting are always ready to help you.