Declaring Bankruptcy – FAQ

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Declaring Bankruptcy – FAQ 2018-08-06T02:58:08+00:00

Can I travel abroad?

Yes. All you will have to do is apply to your bankruptcy trustee for consent to go. You’ll get it, however there is a one-page form you will need to fill in simply to notify the trustee of how long you will be traveling, etc. This regulation is really only there so high flyers don’t skip the country. In some cases the trustee will ask for your passport, but don’t stress about it because you can ask for it back when you need to travel. Call us if you want to know more about travel on 1300 795 575.

Can I keep my property?

In many cases the answer is yes! Actually, in many cases these days we can help you keep your house. At Bankruptcy Experts we are specialists at helping people keep their houses. It’s potentially very complicated, so if you are concerned about losing your home call us on 1300 795 575 and we will walk you through your options.

The consideration of losing the family home is probably the greatest deterrent to people filing for bankruptcy. We chat with people regularly who have battled for years under significant financial tension so they don’t lose their home.

So how is it possible to become bankrupt and keep your home? Simple, really; it’s a matter of equity. Let’s put it like this, if you own a home that’s worth $350,000 and you owe the bank $350,000 you essentially have no equity in the house, right? The trustee will only sell your home if there is enough equity in the home if sold to repay a number of your debts. So in this particular instance, the trustee will then offer you some alternatives, one of which is to simply to continue paying the mortgage and stay in the house while you are bankrupt.

So how can I learn the value of my home? A simple way is to go onto realestate.com. au and check out the sold houses tab in the Taree area and it will show you all the recent sales in your neighborhood. Another choice, if you are confident or are very uneasy, is to have a registered valuer do a valuation on your home, not a real estate agent (unless they are registered valuers, of course). Be advised this will cost you somewhere between $300-700. Just one more thing about house values. If the trustee wants to sell your house they do this reasonably quickly. It’s not a 6-month glossy promotional campaign and instead it’s often by auction and they just meet the market on the day and that’s it. So when thinking of the value remember it’s a sell now price, not when the market improves.

Once you have discovered the market value of your house the next thing to assess is ownership.

Generally most home loans are between 2 people as joint tenants who both contribute to the home loan. If only one party is filing for bankruptcy then the equity is calculated like this.

Say your home is worth $400,000 and the current market value is $350,000. Then the remaining equity in the home is $50,000, right? Half of that total equity is automatically designated to the party not going bankrupt, leaving $25,000 for the bankrupt. Out of that $25,000 the bankrupt party has to pay for all of the selling costs including marketing etc., which, according to where you live, can cost anywhere between $12,000-20,000. In this case say the selling fees are going to be $15,000 then the remaining left over after the sale is $10,000. So in this case the trustee will give the non-bankrupt party a variety of options. One of which is popular is for the bank to say, “Pay us the $10,000 and we won’t sell the home and you will have it removed as an asset from the bankrupt’s estate.” Or, in other words, work out a deal to pay the $10,000 and you can keep your home.

Just a side note: the credit union who has given you the mortgage will want the repayments to be continued obviously. Regardless of what the trustee decides, if you don’t pay the lender the loan they will ultimately ask you to leave. So, put simply, keeping your house obviously implies keeping the debt also.

There are many more possibilities with your house, and we have just described one option of potentially 20 alternatives you can choose from, when it pertains to your house. We understand you have to get this correct. Gambling with the family home can be a terrible business. If you want to get the correct advice or you just need to talk to someone phone us on 1300 795 575.

When would my international travel be limited?

Your travel would be restricted by the trustee as a result of legal action. For example, if your bankruptcy is a part of a criminal investigation or fraudulent activities, it’s possible the trustee will restrict your travel.

What happens to my credit rating?

Bankruptcy lasts 3 years and will stay on your credit file for that time. Nevertheless, as with any default it will be visible on your credit record for 7 years. You can have it taken off if you get your bankruptcy annulled.

Will I ever have the capacity to borrow money again once I’m bankrupt?

Bankruptcy lasts 3 years, and in that time you will not get a loan. After the 3 years is elapsed you will have the chance to get loans; you just won’t get the greatest rate. Your credit file will be wiped clean 4 years after you have been discharged as a bankrupt then you will have a perfect credit report again and you will get the best deal on loans.

Will I lose my car if I go bankrupt?

Normally no. Bankrupts hardly ever lose their cars because they’ve filed for bankruptcy. Naturally, this is conditional and we can let you know if yours is safe. Contact Bankruptcy Experts Taree on 1300 795 575.

There is a threshold or amount of wholesale value your car could be worth while you are bankrupt, which is $7,700. You will find all sorts of inaccurate information about this on the internet, but here are the facts. That $7,700 represents not the total value; it represents equity. So, in other words, if you have a car worth $35,000 you are repaying or leasing and the amount you could sell it for is $30,000 then you can keep your car because its equity is only $5,000. The company that lent you the loan for the car will be content for you to keep the car even though you are bankrupt provided that you continue the payments.

What if I’m overdue on my car monthly payments and I go bankrupt; will they reposess my car?

Get some advice on this one. If you need some advice today just call 1300 795 575. Basically, you will get about 2 to 3 payments grace when it comes to car loans. The bottom line is simple: whether you are bankrupt or not, if you miss 3 or more monthly payments on your car loan the lender will repossess the car. Don’t think because you are filing for bankruptcy you are automatically going to lose your car because in most cases we help people retain them.

When are the creditors notified of my bankruptcy?

The creditors, or the people you owe money to, are notified in writing at about the same time you receive your bankruptcy file notification.

Will anyone visit my home?

No. The bankruptcy procedure is basically a paperwork exercise. All that actually occurs is you will either be written to or emailed a letter informing you that you are bankrupt. At Bankruptcy Experts Taree we ensure that this entire process is that straightforward, so if you have concerns about this phone 1300 795 575.

Can I have my bankruptcy annulled?

Yes. This process will take about 2 weeks and will entirely remove the bankruptcy from your credit history. There are provisions within the Bankruptcy Act that permit a bankrupt individual to have their bankruptcy annulled through a Section 73 proposal.

The repercussions of creditor’s claims can often result in bankruptcy, irrespective whether or not it was the individual’s preference to enter bankruptcy, or if it was filed by a creditor. However, bankruptcy is far from the end of the world for the person who experiences bankruptcy.

We have been assisting people in the Taree area for years so phone us today on 1300 795 575 to get some insight on this matter. We work out the best possible strategy for you to get back up and running, removing residual effects and barriers of past financial circumstances to give you the best possible outcome. Having experience and skills specialising in Section 73 proposals, we can combine this with our proven solutions and tactics to bring you through bankruptcy unscathed, ready to start over.

Can I get my bankruptcy annulled?

To start with, having your bankruptcy annulled is generally reversing it 100 %. So if you are imagining you would like to have your bankruptcy annulled there are a few things you have to know.

Firstly, how does the annulment actually work? A simple way to understand it is let’s say someone owes you $50,000 and they haven’t paid you one cent back for many years. Then to make matters worse you learn that they have gone bankrupt. You would kiss that cash goodbye, right? Many years pass and they come to you with an offer to pay you $5,000 that their father is offering to them to settle your debt with them. Naturally you are happy to take it, because it is better than nothing. The only condition they request in return is that you agree to have the bankruptcy removed from their record, and if you don’t agree to do that then there will be no $5,000. Obviously you don’t care about their credit file; you are just over the moon they are offering you some money after all these years.

In bankruptcy terms this technique is often described as a Section 73 proposal, and it’s an approach where “everybody wins.”

Essentially the trustee meets your creditors, proposes your offer, which is significantly less than the original amount owed, on the condition they wipe your credit history clean.

This course of action takes a few weeks. The proposal can be done at any time in the 3 years you are bankrupt. However, you need to bear in mind the timing of your proposal. Because it does cost money to do this, you need to make sure the odds are on your side. As an example, if you are repaying money to the trustee each week because you earn over the threshold amount, then your creditors will know they are going to get a certain amount from you over the 3 years anyway so it better be more than that will add up to.

If you have only been bankrupt 3 weeks it will be more challenging to get an annulment because they may get some funds from you over the 3 years if you earn over the threshold sum of money.

If you want assistance to put a section 73 proposal to your trustee or just want more details about the timing of when to put an offer forward, just phone us on 1300 795 575.

Can I go bankrupt if I’m already in a Debt Agreement or Personal Insolvency Agreement or in a Debt Consolidation Loan Contract?

Yes! We can assist you get out of all of these arrangements. With Debt Agreements and Personal Insolvency Agreements we have to have you discharged from them first before you declare bankruptcy, but it’s no problem. If you are locked into one of these and simply can’t get on top give us ring at 1300 795 575.

What debts won’t bankruptcy erase?

There are very few debts that bankruptcy won’t 100 % wipe out, like Centrelink, child support, HECS and a court-imposed fine (speeding fines, etc.) and, finally, money owed to an insurance company as a result of a car accident in an uninsured car that you were driving.

Aside from that, it will remove things like your credit cards, store cards, GST and tax, unsecured personal loans, etc. Actually, there are a lot of things to list so if you have a particular debt you are worried about just call for a free consultation 1300 795 575.

Is there a limit to the amount of debt I can go bankrupt for?

You can’t file for bankruptcy for an amount less than $5,000; however, there is no limit beyond that. If you owe a couple million dollars, that’s dealt with no differently than $20,000.

What is the difference between a secured and unsecured loan?

An unsecured creditor is a creditor who does not have a hold over the chattels/assets/property acquired with the credit given to you. Such debts include credit card debts.

A secured creditor has a hold over the chattels/assets/property until the debt is paid in full. If a debtor defaults on a secured debt, the creditor has the right to repossess and sell the chattels/assets/property to reduce the debt.

How can I be sure that you will be successful in making me bankrupt?

We have helped thousands of people declare bankruptcy for many years and we have never had anyone’s application rejected. That’s why we offer a 100 % money back guarantee.

Suppose I’m not completely sure who I owe money to?

There is a straightforward method we use here, and all you need to do is get a copy of your credit file as it will have your entire credit history on there. Companies like www.veda.com.au will be able to get you a copy for a small fee.

I’ve had a motor vehicle accident. Will the debt be covered in bankruptcy?

Motor vehicle accidents can possibly be tricky, so to keep it simple call us on 1300 795 575 to get the right advice on your situation. However, as a general rule, if you were driving a vehicle that was not insured then the cost of the repairs is not erased with bankruptcy. Having said that, it depends who admitted liability or who was at fault. If you go to court and the court validates you were not at fault then you should be good.

Can I have business debts eliminated with my bankruptcy also?

Yes! We can help you do this, although it’s possible there are effects and plenty of regulations around this procedure, so call us and we will guide you through the procedure on 1300 795 575. Bankruptcy Experts Taree are experts at helping businesses get back on their feet.

Can I pay out my bankruptcy debt and have it annulled?

Yes. There is a process to follow, but if you win lotto or inherit some funds you can use it to get your slate wiped clean. There is a way of carrying this out properly; just phone us first.

What if someone is bankrupting me; is there anything I should do?

Generally, if you owe money to someone they can obtain a court order and bankrupt you. They have to follow a process, but it is feasible. What you want to avoid at all costs if possible is someone else bankrupting you, as it’s always best to voluntarily declare bankruptcy. Unless you enjoy court cases and harassing phone calls, of course.

What if my company has received a Demand or Wind-Up notice; can I still go bankrupt?

Yes. However, this is a complicated process and we suggest you get some expert advice; if its handled incorrectly, it could be disastrous. For a free consultation contact Bankruptcy Experts Taree 1300 795 575.

Do I have to contact my creditors?

No, we do that for you. Actually, we serve as a buffer or a midway point between you and your creditors. So basically you are not obliged to notify them of your bankruptcy; we take care of that for you.

How long does bankruptcy last?

Three Years.

How long does it take to declare bankruptcy?

Usually, it takes about 2 weeks.

What if someone else signed for a loan (joint loan or guarantor) and I go bankrupt; will they still be liable for the debt?

Yes. Generally a lender will pursue the other person who signed the loan documents with you for the full amount of the outstanding money owing on the loan.

What happens to a debt I forgot about at the time of becoming bankrupt?

Don’t panic! If you overlooked a debt and remembered it later, just speak with your trustee with the name of the creditor, address, date the debt was acquired, amount of debt and any account or reference number/s provided by the lender. Your trustee will add the creditor to your bankruptcy and mail a notification to the creditor.

Do I have to go to court if I go bankrupt?

No. We take care of the entire process for you.

What if I have gambled some of my money and I go bankrupt; will I get in strife?

Usually this is not a problem, so if you are a gambler, don’t worry. What the trustee doesn’t like is inconsistency here. In other words, you have never taken a chance in your life and all of a sudden you lost $50,000 on the horses, then you might have some explaining to do, of course, because it just doesn’t add up.

Can my bankruptcy be carried out the phone?

Yes. We understand you are busy. If you have a phone we can help you; simply call us on 1300 795 575.

What if I’m living offshore; can I still file for bankruptcy?

Yes. This is feasible. It necessitates some emails to and fro but it can be carried out.

Can I include my foreign debts in my bankruptcy?

Yes. If an individual originally staying in another country now residing in Australia files for bankruptcy and they have a debt incurred in that foreign country, you just list that debt on the paperwork.

In most cases the creditor overseas will eliminate the debt. It is possible and legal for them, however, to reject your application, and if you revisit that country you may be subject to their bankruptcy laws.

How will the trustee know what assets I have?

There are a few ways the trustee can find out, and the most suitable and easiest way is for you to tell them when we do the paperwork. There is also a government register which has major assets listed also. You ought to get some advice about assets; be careful.

Can I keep an inheritance if I file for bankruptcy?

This is complicated and you will require the right guidance, so if you need more information about inheritances call us on 1300 795 575.

Will I lose my Pension or Workers Compensation payments if I file for bankruptcy?

No. The income thresholds are the same for everyone so regardless of how you earn your income you have to earn about $50,000 each year before your income will be affected by bankruptcy.

Will I have the ability to keep my tax returns once I’m bankrupt?

Yes, if you owe the Australian Tax Office money. Put simply, if one of your debts is tax debt, then no, the Australian Tax Office will keep the money you owe them.

No, if you do not owe the ATO money. Your income tax return is deemed take-home pay, so if you are under the threshold amount you can earn while bankrupt then you will get your entire income tax return back.

What about child support ?

If you need to pay child support, this money will be deducted from your net income, so what you get to keep after you pay your tax and then child support is considered net income. That is why in the world of bankruptcy net income numbers are always quoted.

Can I buy shares and make investments while I’m bankrupt?

Yes, you are allowed even while you are bankrupt, but the trustee will take them off you, as they are deemed an asset.

What assets can I keep if I go bankrupt?

You can keep almost everything except big things like houses, cars, shares and inheritances. Even things like houses and cars may be able to be kept. Just give us a call before you make any big decisions on 1300 795 575 for Bankruptcy Experts Taree.

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