A Guide To Bankruptcy Laws

Are you considering declaring bankruptcy?  Knowing the bankruptcy laws will help you make the right decisions about your financial future as well as your rights and responsibilities should you go bankrupt.  If you can no longer afford to pay your creditors and are unable to service your debts, bankruptcy is an option you should consider.  However before you make a decision about bankruptcy should consider what effects of bankruptcy will have on your life now and in the future.  While bankruptcy is supposed to help people get their financial futures back on track, there are risks involved throughout the process.

An Overview of Bankruptcy Laws

What is bankruptcy?  In bankruptcy the laws are there to provide protection to you, the borrower, when you are unable to repay your debts and to provide a workable resolution between you and your creditors. If you cannot come to an informal or formal agreement to repay those debts with your creditor then you may want to proceed with bankruptcy.  Bankruptcy can occur one of two ways,  the most common situation is for the borrower to file voluntarily, which means providing the correct documentation and going through the bankruptcy laws to make the process happen.  The other option is for one of your creditors to seek to have you declared bankrupt through the courts.

Limits and Procedures in Bankruptcy Law

There are no limits on how much you need to be in debt before you can file.  No limit to the amount of property that you own or the amount of income you earn. To file bankruptcy in Australia you must be a resident there, residing in the country at the time of insolvency or you must own a home or business in Australia.

Once you determine that you want to declare bankruptcy you should contact a register trustee to help you through the process.  Legally, you must file all legal forms with ITSA, the government body which handles bankruptcy.  The bankruptcy laws require that you file the following forms in that manner.

Once these documents have been completed you can begin the bankruptcy process.  Depending on your income you may have to pay income contributions to service your bankruptcy. Additionally if you own property or a vehicle of a certain value, you may need to sell these assets and provide the proceeds to your trustee. In order to ascertain whether this is applicable to you, you should discuss your situation with a registered trustee or ITSA.

Bankruptcy law in Australia states that you will remain bankrupt for as little as three years.  However, for this to occur you need to remain in cooperation with your trustee.  In situations where this does not happen, it can take as long as five to eight years for you to be discharged from bankruptcy.

There are situations that you should take into consideration.  While most creditors are unable to continue to collect a debt from you, some types of debt are not qualified for bankruptcy.  These include:

Bankruptcy laws may also have an effect on your occupation and should discuss any ramifications with your employer or prospective employer.  You may not hold various licenses either, including builder’s licenses, real estate licenses, liquor license, tax agent’s licenses and others.  You cannot be a director of any company without approval.  As you can see, the bankruptcy laws will change your life.

Fox Symes has guided and assisted over 30,000 Australian individuals and families resolve their financial position and regain control of their lives.

If you have bad credit and need further help you can contact us on 1300 361 204 for information and assistance on what options may be open to you in your individual

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