What are the consequences?

Going bankrupt means that in most circumstances, debtors are unable to commence or continue debt recovery actions against you. Note that this only applies to unsecured debtors – secured creditors are still able to seize your property if you don’t meet your loan repayments. You’re also still liable for:

• HECS Payments
• Court Fines/Penalties
• Child Support
• Council and Water Rates

Declaring bankruptcy will generally not affect your employment opportunities, though you may be barred from some vocations like police officer or security guard. You’ll typically also have difficulty to obtaining liquor, tax agent, real estate, financial, and builder’s licenses.
If you still feel that going bankrupt is the right option for you, you will find more resources on this site to assist you. Start by checking out the Bankruptcy Advice section.
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Bankruptcy is not the end of the world

 

For many people today, it can feel like the financial world is crashing all around. Those individuals who have opted for bankruptcy might feel like the world is coming to an end. After all, going through a bankruptcy is stressful and it can take a toll on the body and mind. With that said, these individuals should know that going through a bankruptcy is truly not the end of the world. Life will go on and plenty of people have recovered from bankruptcy. For individuals who can persevere and keep a good outlook, it is wholly possible to make it out of bankruptcy alive.

A temporary financial problem
The first thing to know about bankruptcy is that it is temporary. Though it might seem like the your credit report will be scarred for eternity, this is really not the case. Depending upon which company has reported the bankruptcy, it will be on your report for a period of a few years. Though this might seem like a long time, know that the bad mark will eventually come off. This can give you some hope for the future in knowing that each day is one step closer to having your financial life back.

An opportunity to start over
What bankruptcy does offer is a chance to start over anew. Debt is troublesome and it can weigh on you. When you are under pressure to make payments and you can't meet your obligations, it can ruin your entire life. Bankruptcy is a positive because it allows you a legal means of getting out from under this stress. Though no one will think of bankruptcy as a positive thing while going through it, they should be able to see the value in getting a fresh start. After a few years, you will have an opportunity to do things financially as if you were a new person. This means that declaring is truly not the end of the world.

There is simply no disputing that bankruptcy feels like one of the worst things that can happen to a person. To be fair, it presents difficulties that most people will never have to experience. Keep things in perspective, though, and know that bankruptcy is a temporary stop on the road to financial recovery. People who take the right approach and the proper mindset end up better off as a result of discharging their debts.

 

Article Supplied By Jonathan

 

Recovering from Bankruptcy: Keys to Re-establishing Your Financial Future  

Bankruptcy can be an extremely stressful point in your life. You’ve hit rock bottom and there is no hope to meet your financial obligations. You may have fallen behind on your bills because of a medical expense, a loss of employment, or an unhealthy shopping addiction! Whatever the reason, you’re lost at sea and bankruptcy is the only thing left to keep you afloat.  

             

Despite all of the negative connotations associated with bankruptcy, it is a tool that can be used to re-establish your financial future. Yes, filing for bankruptcy will be considered a “black spot” on your credit history and it will penalize you. There is nothing you can do to change the fact that you’ve defaulted on several loans or credit cards. Everyone knows that filing is not something you should want to do, but it may be something you need to do. 

Step 1: File for Bankruptcy 

             

Don’t worry, it’s not so bad! Bankruptcy is a tool to restart your life and bring back a sense of normalcy. Once you’ve filed and court judgment has been issued, most of your debts should be wiped away. It may take several months for creditors to take notice of the judgment, so you may have to field a few more collection calls. Fortunately, you will be able to direct them to your bankruptcy attorney and those bothersome debt collectors will cease. You’re in the clear, but there is still more work to be done. If you continue to spend resources that you do not have, you will wind up in more trouble.  

             

Surprisingly, you may begin to receive credit card offers immediately after issuance of your judgment. You may even receive credit offers from companies that you were unable to pay before your bankruptcy! But beware, you must read all of the paperwork before opening any line of credit. The credit card offers you will receive will have higher interest rates, lower lines of credit, and annual fees. Pick the best and leave the rest. One or two new credit cards within the first two years of your bankruptcy will help your credit score grow!  

Step 2: Baby Steps to Better Credit 

Now that you have that precious plastic in your pocket, do not use credit for everything. Remember every reason why you had to file for bankruptcy and think before you purchase! Will you have the ability to pay your credit card statement if you choose to make this purchase? If you don’t think you can pony-up a payment, do not buy - frugal living is the new name of the game. It is even more important than ever to pay your bills on time. You need to earn trust to rebuild your credit and maxing out cards is not the best way to earn that trust. To increase confidence in your financial credibility, make small purchases that you can easily pay off in full every month. This practice will show future loan officers that you can responsibly make purchases and keep your balance low. Building fiscal responsibility will take time and the more you curb old spending-habits, the better your chances are to be approved for larger amounts of credit.  

Is Bankruptcy the right option for me?

As a debtor, you should only really consider declaring bankruptcy after you’ve explored all the other options first. When you are declared bankrupt, your details get recorded on a government database known as the National Personal Insolvency Index, or NPII. Banks and other creditors will generally always consult the NPII before they’ll lend anyone money or even considered for credit cards, so declaring bankruptcy is likely to severely hurt your ability to obtain credit like home loans , personal loans or apply for a credit card .
How do I declare Bankruptcy?
Declaring bankruptcy is a fairly simple process. A debtor’s petition, statement of affairs, and acknowledgement that you have received and read over the ‘prescribed information’ needs to be lodged with a registered trustee or directly with the Insolvency and Trustee Service of Australia (ITSA).
Filing for bankruptcy is free, though if you choose to go through a registered trustee, they are entitled to remuneration. These fees can generally be taken out of the proceeds of a property sale, so long as the creditor(s) provide their consent.
Bankruptcy lasts a minimum of three years if you can come to an acceptable agreement with your creditor(s) and consistently meet your obligations, though under certain circumstances this may be extended to 8 years.

Bankruptcy Information

Welcome to Bankruptcy Information. If you’re thinking of declaring yourself or your business bankrupt, it’s absolutely crucial that you educate yourself on the correct process before making any decisions.
What is Bankruptcy all about?
Essentially, bankruptcy is a legal process whereby the debtor officially declares their inability to repay their debts. It offers certain legal protection to the declarer and has important ramifications for both creditors and debtors. The bankruptcy act has strict rules when it comes to declaring yourself bankrupt.
There are two fundamental ways in which an individual or business can be  made bankrupt – either voluntarily, by completing and filing the appropriate paperwork, or involuntarily, by order of a court. The latter generally occurs at the instigation of a creditor who is owed $2000 or more.