Before declaring Bankruptcy you should consider whether you have other alternatives.
However, If you have debt that you are finding difficulty in paying and you are unable to come to a suitable repayment arrangement with the creditor, you will have the option to declare bankruptcy. Your creditors may also make application to the court to declare you bankrupt. They will have to prove to the court that you owe them above a certain amount.
The minimum amount a creditor can send you bankrupt for is $5000.00
If you opt for bankruptcy, you are required to complete a Debtor's Petition Form. A Statement of Affairs will have to be drafted. This is a statement which discloses all your current financial information like assets that you own or recently owned and all the debts that you currently have. It is vital that these forms are completed correctly. In the event that you hide an asset or fail to disclose a debt, an objection could be lodged by your trustee and your bankruptcy term might be extended.
Bankruptcy does not release you from all your debts. Child support, student loans, HECS debts, debts incurred by fraud or penalties/fines imposed by the court are some of the debts that you will still have to pay even if you file for bankruptcy. Any debts that you incur after the date of your bankruptcy must also be paid.
The assets that you may lose upon bankruptcy include property or any other unsecured assets. Secured assets may be sold to cover the debt. Cash in your bank account over a specified amount may be lost.
You are entitled to retain certain assets like tools of your trade and your motor vehicle. There are limitations on the value of these assets though. Household goods that are necessary for you to live and personal effects may also be retained.
There are certain restrictions that may apply if you are bankrupt. You may be required to surrender your passport to your trustee. You will only be allowed to travel overseas at the discretion of your trustee. You cannot become or remain a company director or secretary if you are bankrupt. Any assets that you acquire during this period may be handed to your trustee as 'after acquired' assets.
The decision to declare bankruptcy should not be taken lightly. If you feel that you have no other option but to choose bankruptcy, please call us at Declare Bankruptcy on 02 9631 2223. An experienced consultant will be able to assist you with any further questions.