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

When it comes to Bankruptcy Toowoomba, generally people aren't aware that there can be both voluntary, and involuntary bankruptcy - both of these have distinct methods and rules.

Involuntary bankruptcy happens when someone you owe money to involves the court to declare you bankrupt. Commonly when you get one of these particular notices, you have 21 days to pay all the debt. If you don't, then the creditor goes back to the court and requests the court to issue a sequestration order that declares you bankrupt. A trustee is selected, and then you have 14 days to get the paperwork in and afterwards you are bankrupt.

You can object to a bankruptcy notice by going to court right after the 21 days have expired and put your case forward, to prevent it going to the next level. Other than the way you became bankrupt there is in reality no difference between Involuntary Bankruptcy and or Voluntary Bankruptcy - once you are simply declared bankrupt, they're conducted to in the same way.

However, when it concerns Bankruptcy for this, the stress, torment and fear that accompanies this process is incredible. If you think you are probable to be made bankrupt by someone, get some tips 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 an individual bankrupt you. Once you are bankrupt, it's typically far too late.

Voluntary Bankruptcy

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

This question is not the 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 every one of your debts - if its longer than 3 years (the period you are declared bankrupt), then this may serve to help 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 overlook 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 remain 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 impact how you have to approach Bankruptcy.

In many ways, the ease with which companies/credit providers can default your credit file is unscrupulous. The punishment doesn't seem to equate to the crime in my book. So if you already 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 detail in trying to decide whether to take part in 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 change is that with a DA or PIA you pay back the money and still 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 more people are afraid of when they come to me to discuss their financial situation and Bankruptcy. The other side of crime and punishment equation is bankruptcy, and in this specific 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 to countries like the United States, our bankruptcy laws are extremely good.

I don't pretend to know why that is but a few hundred years ago debtors went to prison. These days I suppose the government finds that 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 all 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 pay for a car accident if the car was not actually insured.

There is much more that can be said about this and Bankruptcy in general but the purpose of this blog was to help you decide between a few readily available options. When getting some advice, bear in mind that there are always choices when it relates to Bankruptcy in Toowoomba, 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 consult with Bankruptcy Experts Toowoomba on 1300 795 575, or visit our website: www.bankruptcyexpertsToowoomba.com.au.