File For Bankruptcy
If you have exhausted all your other options to try and repay your debt and are thinking of opting for bankruptcy, there are a few facts you should consider. Even though you can start afresh after bankruptcy, there are severe consequences involved when choosing this option.
If you are unable to pay your debts and have been unable to reach a mutually agreed upon repayment arrangement with your creditors, then you should consider bankruptcy. You can voluntarily file for bankruptcy. The other method is that one of your creditors will petition to initiate your bankruptcy.
Once you have made the decision to become bankrupt, you should complete a Debtor's Petition form. You should also complete a Statement of Affairs which is a disclosure of all relevant details of your current financial situation. This statement will be a listing of all your current assets as well as those which you previously owned. It should also contain a detailed list of all your debt.
This information should be forwarded to ITSA. This is the government body that handles bankruptcy. At this point you should make contact with a registered trustee to assist you with the process. If you omit to appoint a trustee, one will be appointed on your behalf by ITSA.
There are no set amounts of debt for you to be eligible to apply for bankruptcy. There are also no limits on the value of assets you own or the amount of income you earn if you wish to apply for bankruptcy. To be eligible to file for bankruptcy in Australia, you need to be a resident at the time of your application or you should own a business or a home in the country.
Your trustee will sell all your assets and the funds will be distributed to your creditors. If you have any secured debts, the asset that it covers will be sold to cover the debt. You will not lose household goods that are required for your normal living or a car which is below a specified value. You can retain any tools of your normal trade.
Bankruptcy could have an effect on your employment situation, but this is dependent on what your profession is. You may not be a director of a company without approval from the authorities.
You will remain bankrupt for a period of three years. For this time period to remain in effect, you have obligations that you have to meet. If you change your address, you should notify your trustee. You may have to surrender your passport, but this will be at the discretion of your trustee.
There are many complications that you might encounter when filing for bankruptcy. You should consider consulting with a professional in this field. If you need to file for bankruptcy, give us a call on 02 9631 2223 for free professional advice.