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

When it comes to Bankruptcy Lismore, commonly people aren't aware that there are both voluntary, and involuntary bankruptcy - both have distinct methods and guidelines.

Involuntary bankruptcy occurs when somebody you owe money to involves the court to declare you bankrupt. Commonly when you get one of these particular notices, you have actually 21 days to pay all the debt. If you don't, then the creditor returns 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 paperwork in and after that 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 reality no distinction between Involuntary Bankruptcy and or Voluntary Bankruptcy - once you are declared bankrupt, they're overseen to in the same way.

However, when it comes to Bankruptcy for this, the stress and anxiety, torment and fear that accompanies this process is incredible. If you think you are more than likely to be made bankrupt by someone, get some help and act on that advice. Generally I've found it's always more ideal to know what you can and can't do before you have somebody bankrupt you. Once you are bankrupt, it's normally too late.

Voluntary Bankruptcy

However, when it comes to Bankruptcy, sometimes there are times that it is the best option. So you may need to ask yourself, 'when should I consider voluntary Bankruptcy?'.

This question is not the very same for everybody of course, but usually 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 assist you make that decision, and help you to understand Bankruptcy.

Once, I had an 80 year old pensioner, who came 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 very 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 amount to the crime in my book. So if you currently have defaults on your credit report for 5 years, remember 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 factor 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 contrast is that with a DA or PIA you pay back 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 element most 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 arrangements are very generous: you can go bankrupt owing millions of dollars and after 3 years it's all over with no strings attached. Compared with countries like the United States, our bankruptcy laws are extremely good.

I don't claim to know why that is but a few hundred years ago debtors went to prison. Nowadays 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 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 insured.

There is a lot 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 available options. When getting some advice, remember that there are always possibilities when it concerns Bankruptcy in Lismore, so do some research, and Good luck!

If you want to find out more about just what to do, where to turn and what questions to ask about Bankruptcy, then don't hesitate to talk to Bankruptcy Experts Lismore on 1300 795 575, or visit our website:.bankruptcyexpertsLismore.com.au.