Declaring Bankruptcy: a viable way out of debt
Declaring Bankruptcy is considered the last resort for people who are seriously struggling with their debt. But for some, it may be their best, or their only option.
Debt Rescue will recommend bankruptcy for you if your debts are unmanageable and other strategies don’t fit your financial capacity.
The issue is often taboo and there are many myths about how it works.
Debt Rescue makes bankruptcy simple to understand and we walk you through the process so you don’t have to worry any longer.
Filing for Bankruptcy in Australia
Declaring Bankruptcy in Australia is a seemingly simple process. You can download the forms needed from the Australian Financial Security Authority website. Once these forms are filled in completely and correctly, you need to submit them to AFSA with all the required supporting documents.
Once the forms are processed, you will be assigned a Bankruptcy Trustee who will go through the process to declare you a bankrupt. This process includes selling any assets with values exceeding the set thresholds
Before you declare bankruptcy, you should familiarise yourself with the restrictions and obligations involved to ensure they won’t have a large impact on your life.
Many people who enter into Bankruptcy aren’t aware of the entire ramifications often contained within the small print and may therefore struggle throughout the term of the agreement.
That is why at Debt Rescue, we will talk you through the entire process so you can decide if it is the best option for you.
Bankruptcy restrictions and obligations
Bankruptcy has a formidable reputation as something that is shameful, embarrassing and punishing. But Bankruptcy has been given a bad wrap. While it does involve some restrictions on your lifestyle, for the most part, it offers you a stress-free way to get out of debt.
The period of Bankruptcy lasts for 3 years. In this time, you must abide by the obligations and restrictions set out in the bankruptcy act. These include:
- applying to travel overseas
- making income contributions (if you earn more than the set thresholds)
- not owning property or assets which exceed the set thresholds
- not owning or operating a company
- disclosing you are bankrupt when applying for new finance exceeding the set threshold
You can read all the restrictions of bankruptcy here. At the end of 3 years, the Bankruptcy restrictions are lifted, however it will be noted on your credit file for another 2 years that you are a discharged bankrupt, so it will be noted on your credit file for a minimum of 5 years.
Your name will be listed on the National Personal Insolvency Index for life. This is a register of all insolvency activity which anyone can access for a fee. it is sometimes used by banks or service providers to see if you have been bankrupt previously.
The Benefits of Bankruptcy
Bankruptcy is not for everyone. Some industries that require licences, like property, finance and security won’t allow you to continue working in your position if you declare bankruptcy. Some people want to hold on to their property and assets and some people need to travel for work so they try to avoid bankruptcy at all costs. But for people who are facing a severe debt situation, bankruptcy can be a saving grace.
- Bankruptcy wipes all your unsecured debts so you are no longer obligated to make regular repayments
- You aren’t obligated to tell anyone about your bankruptcy. It’s entirely up to you
- You no longer have to deal with your creditors or receive harassing calls and emails
- There is no minimum or maximum amount of debt required to declare bankruptcy
Bankruptcy Tips for Homeowners
One of the biggest consequences of declaring bankruptcy is losing your family home. This is often the case as bankrupts aren’t permitted to own property. But depending on your circumstances, there may be a way you can keep your family home for the duration of your bankruptcy.
Watch this video to learn more about how you can prevent your home from being sold. To see if this might be a possible option for you, call us now on 1800 00 3328. We will learn about your situation and make recommendations for you.
How Debt Rescue Can Help you with Bankruptcy
Debt Rescue is committed to genuinely assist Australian’s out of debt.
After talking to you about your situation, our experienced case managers will recommend a positive solution to your debt situation.
Should Debt Rescue suggest bankruptcy as the most appropriate course of action for you, we will provide you with all of the relevant information you need to make an informed decision.
We will work with you to ensure you understand the ins and outs of the process and the implications for you personally both during the set period and moving forward.
For more information visit the FAQ page or call Debt Rescue on 1800 00 3328 and Talk to An Aussie Who Cares about your situation.
Free Call: 1800 00 3328