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Declaring Bankruptcy in Australia

21st February, 2013No Comments

Declaring Bankruptcy in Australia is a simple enough process.  However if you combine the constant pressure and harassment from your creditors and the stress you have suffered through your financial ordeal, the simple process suddenly becomes incredibly difficult. Declaring Bankruptcy in Australia is telling your creditors you don’t have enough income or value in assets to cover the debts you owe.

The obligations and restrictions which come hand in hand with declaring Bankruptcy can have a very serious impact on your lifestyle, so it is imperative you consider all your options before you decide to play the Bankruptcy card.

Are you considering declaring Bankruptcy in Australia?

If you are considering declaring Bankruptcy in Australia you need to be certain there isn’t another way out of your debt. While declaring Bankruptcy is the most efficient way to eliminate your debts completely, it comes hand in hand with a range of obligations and restrictions which will impact your life for years.

In Australia, the term of your Bankruptcy will generally last for three years.  So for those three years you will face restrictions on your income, assets, ability to borrow money, employment and overseas travel among other things. Once your Bankruptcy has ended, it will be noted on your credited file for at least a further 4 years, noting you are a discharged bankrupt.  (So in most cases, your bankruptcy will be on your credit file for seven years in total). As a discharged bankrupt, you will be able to do everything a person with a good credit file would be able to, however you may find it difficult going through mainstream financial lenders. For example, if you apply for a loan, a traditional bank might take your bankruptcy into account and refuse your application.

It is still possible to borrow money through non-conforming lenders who base their approval on a different set of criteria.  Companies like Positive Solutions Finance can find competitive loans for people with bad credit ratings, have entered into a debt agreement and discharged bankrupts. For all the details about the obligations and restrictions involved with declaring bankruptcy, check out our blog post – Restrictions during Bankruptcy.

Debt Agreements are an alternative to declaring Bankruptcy

Declaring Bankruptcy in Australia isn’t the only way out of debt. There may be several debt relief strategies available to you.  The trick to success is to find the right debt relief option to suit your personal situation.

Debt Agreements were introduced nearly two decades ago and were designed as an alternative to bankruptcy. In the 2013-2014 financial year more than 10,000 Aussies used a Debt Agreement as a solution to their debts. A Debt Agreement is a contract between you and your creditors outlining a new repayment arrangement you can afford. Often, you will only need to repay a small percentage of your original debt while all future interest and fees are frozen. Entering into a Debt Agreement is still an act of bankruptcy, however it doesn’t come with a long list of restrictions and obligations associated with bankruptcy. To learn more about Debt Agreements you can read our blog post – Debt Agreements: A positive solution to bad debt.

Help with declaring Bankruptcy in Australia

To be 100% sure declaring Bankruptcy is the right option for you, call Debt Rescue on 1800 00 3328 and discuss your situation with an experienced Case Manager.  They will speak to you about your financial situation and recommend the best course of action for you.

If it is declaring Bankruptcy, Debt Rescue can take you through the Bankruptcy process and ensure it is completed correctly.  We can answer any questions you have along the way and ensure the entire experience is quick and free from stress. Alternatively, we may be able to recommend a different debt relief solution for you. If you are considering declaring bankruptcy in Australia, talk to a Debt Rescue Case Manager today.

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