Declaring Bankruptcy – FAQ

Home/Declaring Bankruptcy – FAQ
Declaring Bankruptcy – FAQ 2017-10-20T05:01:52+00:00

Can I travel to another country?

Yes. All you will have to do is apply to your bankruptcy trustee for permission to go. You’ll get it, however there is a one-page form you need to fill in simply to notify the trustee of how long you will be taking a trip, etc. This requirement is really only there so high flyers don’t skip the country. Sometimes the trustee will request your passport, but don’t fret about it because you can request it back when you have to travel. Call us if you need to know more about travel on 1300 795 575.

Can I keep my home?

Oftentimes the answer is yes! As a matter of fact, in many cases these days we can help you keep your home. At Bankruptcy Experts we are specialists at guiding people keep their houses. It’s actually very complicated, so if you are concerned about losing your home call us on 1300 795 575 and we will guide you through your options.

The prospect of losing the family home is probably the most significant obstacle to people filing for bankruptcy. We consult with people each day who have fought for years under significant financial stress so they don’t lose their home.

So how is it possible to be bankrupt and keep your house? Easy, really; it’s a matter of equity. Let’s put it like this, if you own a house that’s worth $350,000 and you owe the bank $350,000 you effectively have no equity in the house, correct? The trustee will only sell your home if there is sufficient equity in the home if sold to pay back some of your debts. So in this particular scenario, the trustee will then offer you some options, one of which is to simply to continue paying the mortgage and live in the house while you are bankrupt.

So how can I determine the market value of my home? A straightforward way is to go onto realestate.com. au and look at the sold houses tab in the Shellharbour area and it will show you all the recent sales in your neighborhood. Another possibility, if you are not sure or are very worried, is to have a registered valuer do a valuation on your home, not a real estate agent (unless they are registered valuers, naturally). Be cautioned this will cost you somewhere between $300-700. Just another aspect of house prices. If the trustee wants to sell your house they do so reasonably quickly. It’s not a 6-month glossy advertising campaign and instead it’s actually by auction and they just meet the market on the day and that’s it. So when considering the value remember it’s a sell now price, not when the market improves.

Once you have figured out the resale value of your house the next thing to assess is ownership.

Generally most home loans are between 2 people as joint tenants who both contribute to the home loan. If only one party is going bankrupt then the equity is worked out this way.

Say the house is worth $400,000 and the current price is $350,000. Then the balance of equity in the home is $50,000, right? Half of that total equity is automatically allocated to the party not going bankrupt, leaving $25,000 for the bankrupt. Out of that $25,000 the bankrupt party has to pay for all of the selling costs including marketing etc., which, depending on where you live, can cost anywhere between $12,000-20,000. In this particular case say the selling costs are going to be $15,000 then the balance left over after the sale is $10,000. So in this case the trustee will give the non-bankrupt party a number of options. One of which is common is for the bank to say, “Pay us the $10,000 and we won’t sell the house and you will have it eliminated as an asset from the bankrupt’s estate.” Or, in other words, negotiate to pay the $10,000 and you can keep your house.

Just a side note: the financial institution who has given you the mortgage will want the payments to be maintained of course. Regardless of what the trustee decides, if you don’t pay the credit union the mortgage they will ultimately ask you to move out. So, put simply, keeping your house naturally implies keeping the mortgage also.

There are many more possibilities with your house, and we have just detailed one option of potentially 20 alternatives you can decide on, when it comes to your house. We understand you have to get this right. Gambling with the family home can possibly be a distressing business. If you intend to get the correct advice or you just want to talk to someone phone us on 1300 795 575.

When would my travel be restricted?

Your international travel would be regulated by the trustee due to adverse legal action. For example, if your bankruptcy is a part of a criminal investigation or fraudulent activities, it’s possible the trustee will restrict your travel.

What happens to my credit score?

Bankruptcy lasts 3 years and will sit on your credit file for that time. Nevertheless, as with any default it will be visible on your credit file for 7 years. You can have it eliminated if you get your bankruptcy annulled.

Will I ever have the chance to borrow money again once I’m bankrupt?

Bankruptcy lasts 3 years, and in that time you will not get a loan. After the 3 years is elapsed you will have the ability to get loans; you just won’t get the most ideal rate. Your credit report will be wiped clean 4 years after you have been discharged as a bankrupt then you will have an ideal credit record again and you will get the most competitive deal on loans.

Will I lose my car if I go bankrupt?

Typically no. Bankrupts almost never lose their cars because they’ve filed for bankruptcy. Of course, this is conditional and we can let you know if yours is safe. Contact Bankruptcy Experts Shellharbour on 1300 795 575.

There is a threshold or amount of wholesale value your car may be worth while you are bankrupt, which is $7,350. You will find all sorts of incorrect information about this on the net, but here are the facts. That $7,350 represents not the total value; it represents equity. So, in other words, if you have a car worth $35,000 you are repaying or leasing and the amount you could sell it for is $30,000 then you can keep your car because its equity is only $5,000. The company that lent you the loan for the car will be satisfied for you to keep the car although you are bankrupt as long as you maintain the payments.

What if I’m behind on my car repayments and I go bankrupt; will they take my car?

Get some advice on this one. If you need some advice today just call 1300 795 575. Basically, you will get about 2 to 3 payments grace when it comes to car loans. The bottom line is simple: whether you are bankrupt or not, if you miss 3 or more payments on your loan the bank will repossess the car. Don’t think because you are going bankrupt you are automatically going to lose your car because most of the time we help people keep them.

When are the creditors informed of my bankruptcy?

The creditors, or the people you owe money to, are notified in writing at about the same time you receive your bankruptcy file notification.

Will anyone come to my house?

No. The bankruptcy process is basically a paperwork exercise. All that actually happens is you will either be sent a letter by snail mail or emailed a letter informing you that you are bankrupt. At Bankruptcy Experts Shellharbour we make sure that this entire process is that easy, so if you have queries about this contact 1300 795 575.

Can I have my bankruptcy annulled?

Yes. This process will take about 2 weeks and will entirely get rid of the bankruptcy from your credit history. There are provisions within the Bankruptcy Act that enable a bankrupt individual to have their bankruptcy annulled through a Section 73 proposal.

The repercussions of creditor’s claims can often result in bankruptcy, despite regardless if it was the individual’s preference to enter bankruptcy, or if it was filed by a creditor. However, bankruptcy is far from the end of the world for the person who undergoes bankruptcy.

We have been assisting people in the Shellharbour area for years so contact us today on 1300 795 575 to get some insight on this issue. We exercise the most suitable possible procedure for you to get back up and running, minimizing residual effects and hindrances of past financial situations to give you the best possible outcome. Having experience and skills specialising in Section 73 proposals, we can combine this with our proven strategies and methods to bring you through bankruptcy unharmed, ready to start over.

Can I get my bankruptcy annulled?

Firstly, having your bankruptcy annulled is ultimately reversing it 100 %. So if you are imagining you would like to have your bankruptcy annulled there are a few things you need to know.

Firstly, how does the annulment actually work? An easy way to understand it is let’s say somebody owes you $50,000 and they haven’t paid you one penny back for years. Then to make matters worse you find out that they have gone bankrupt. You would kiss that cash goodbye, right? Years go by and they come to you with an offer to repay you $5,000 that their aunty is offering to them to settle your debt with them. Of course you are happy to accept it, because it is better than a kick in the teeth. The only condition they request in return is that you agree to have the bankruptcy wiped from their credit history, and if you don’t agree to do that then there will be no $5,000. Of course you don’t care about their record; you are just grateful they are offering you some money after all these years.

In bankruptcy terms this process is typically described as a Section 73 proposal, and it’s an approach where “everybody wins.”.

Essentially the trustee meets your creditors, presents your offer, which is significantly less than the original debt owed, on the condition they clear your credit file clean.

This course of action takes a few weeks. The proposal could be done any time in the 3 years you are bankrupt. However, you have to consider the timing of your proposal. Because it does cost money to do this, you need to make certain the odds are on your side. As an example, if you are paying back money to the trustee each week because you earn over the threshold amount, then your creditors will know they are going to get a certain amount from you over the 3 years in any case so it better be more than that will add up to.

If you have only been bankrupt 3 weeks it will be tougher to get an annulment because they might get some money from you over the 3 years if you earn over the threshold sum of money.

If you want help to put a section 73 proposal to your trustee or just need more information about the timing of when to put an offer forward, just give us a call on 1300 795 575.

Can I go bankrupt if I’m currently in a Debt Agreement or Personal Insolvency Agreement or in a Debt Consolidation Loan Contract?

Yes! We can assist you finalise all of these agreements. With Debt Agreements and Personal Insolvency Agreements we have to have you discharged from them first before you file for bankruptcy, but it’s not a problem. If you are locked into one of these and simply can’t get on top give us call at 1300 795 575.

What debts won’t bankruptcy erase?

There are very few debts that bankruptcy won’t 100 % remove, like Centrelink, child support, HECS and a court-imposed fine (speeding fines, etc.) and, finally, money owed to an insurance company as a result of a car accident in an uninsured car that you were driving.

Other than that, it will cancel debts like your credit cards, store cards, GST and tax, unsecured personal loans, etc. Essentially, there are way too many things to list so if you have a particular debt you are concerneded about just call for a free consultation 1300 795 575.

Is there a limit to the amount of debt I can go bankrupt for?

You can’t go bankrupt for an amount under $5,000; however, there is no limit above that. If you owe a couple million dollars, that’s managed no differently than $20,000.

What is the difference between a secured and unsecured loan?

An unsecured creditor is a creditor who does not have a hold over the chattels/assets/property purchased with the credit given to you. Such debts include credit card debts.

A secured creditor has a hold over the chattels/assets/property until the debt is paid in full. If a debtor defaults on a secured loan, the creditor has the right to repossess and sell the chattels/assets/property to pay back the debt.

How can I be sure that you will be successful in making me bankrupt?

We have helped thousands of people apply for bankruptcy over the years and we have never had anyone’s application rejected. That’s why we offer a 100 % money back guarantee.

What if I’m not completely sure who I owe money to?

There is an easy strategy we use here, and all you have to do is get a copy of your credit history as it will have your credit history on there. Companies like www.veda.com.au will be able to get you a copy for a modest fee.

I’ve had a car accident. Will the debt be covered in bankruptcy?

Motor vehicle accidents can possibly be difficult, so to keep it simple call us on 1300 795 575 to get the right advice on your situation. However, as a general rule, if you were driving a vehicle that was not insured then the expense of the repairs is not erased with bankruptcy. Having said that, it depends who admitted liability or who was at fault. If you go to court and the court confirms you were not at fault then you should be okay.

Can I have business debts removed with my bankruptcy also?

Yes! We can help you do this, although it’s possible there are ramifications and plenty of regulations around this process, so call us and we will assist you through the process on 1300 795 575. Bankruptcy Experts Shellharbour are professionals at assisting businesses get back on their feet.

Can I pay out my bankruptcy debt and have it annulled?

Yes. There is an approach to follow, but if you win lotto or inherit some funds you can use it to get your slate wiped clean. There is a way of accomplishing this properly; just give us a call first.

What if someone is bankrupting me; is there anything I should do?

Generally, if you owe money to someone they can obtain a court order and bankrupt you. They have to follow a process, but it is possible. What you need to avoid at all costs if possible is another person bankrupting you, as it’s always best to voluntarily file for bankruptcy. Unless you enjoy court cases and harassing phone calls, of course.

What if my company has received a Demand or Wind-Up notice; can I still go bankrupt?

Yes. However, this is a complex process and we suggest you get some professional advice; if its handled incorrectly, it could be disastrous. For a free consultation call Bankruptcy Experts Shellharbour 1300 795 575.

Do I need to contact my creditors?

A secured creditor has a hold over the chattels/assets/property until the debt is paid in full. If a debtor defaults on a secured loan, the creditor has the right to repossess and sell the chattels/assets/property to pay back the debt.

How can I be sure that you will be successful in making me bankrupt?

We have helped thousands of people apply for bankruptcy over the years and we have never had anyone’s application rejected. That’s why we offer a 100 % money back guarantee.

What if I’m not completely sure who I owe money to?

There is an easy strategy we use here, and all you have to do is get a copy of your credit history as it will have your credit history on there. Companies like www.veda.com.au will be able to get you a copy for a modest fee.

I’ve had a car accident. Will the debt be covered in bankruptcy?

Motor vehicle accidents can possibly be difficult, so to keep it simple call us on 1300 795 575 to get the right advice on your situation. However, as a general rule, if you were driving a vehicle that was not insured then the expense of the repairs is not erased with bankruptcy. Having said that, it depends who admitted liability or who was at fault. If you go to court and the court confirms you were not at fault then you should be okay.

Can I have business debts removed with my bankruptcy also?

Yes! We can help you do this, although it’s possible there are ramifications and plenty of regulations around this process, so call us and we will assist you through the process on 1300 795 575. Bankruptcy Experts Shellharbour are professionals at assisting businesses get back on their feet.

Can I pay out my bankruptcy debt and have it annulled?

Yes. There is an approach to follow, but if you win lotto or inherit some funds you can use it to get your slate wiped clean. There is a way of accomplishing this properly; just give us a call first.

What if someone is bankrupting me; is there anything I should do?

Generally, if you owe money to someone they can obtain a court order and bankrupt you. They have to follow a process, but it is possible. What you need to avoid at all costs if possible is another person bankrupting you, as it’s always best to voluntarily file for bankruptcy. Unless you enjoy court cases and harassing phone calls, of course.

What if my company has received a Demand or Wind-Up notice; can I still go bankrupt?

Yes. However, this is a complex process and we suggest you get some professional advice; if its handled incorrectly, it could be disastrous. For a free consultation call Bankruptcy Experts Shellharbour 1300 795 575.

Do I need to contact my creditors?

No, we do that for you. As a matter of fact, we work as a buffer or a midway point between you and your creditors. So ultimately you are not obliged to notify them of your bankruptcy; we do that for you.

How long does bankruptcy last?

Three Years.

How long does it take to file for bankruptcy?

Usually, it takes about 2 weeks.

What if someone else signed for a loan (joint loan or guarantor) and I go bankrupt; will they still be liable for the debt?

Yes. Usually a lender will pursue the other person who signed the loan papers with you for the sum total of the remaining debt owing on the loan.

What happens to a debt I failed to remember at the time of becoming bankrupt?

Don’t panic! If you overlooked a debt and remember it later, just contact your trustee with the name of the creditor, address, date the debt was incurred, amount of debt and any account or reference number/s supplied by the creditor. Your trustee will add the creditor to your bankruptcy paperwork and send out a notification to the creditor.

Do I have to go to court if I go bankrupt?

No. We take care of the entire procedure for you.

What if I have gambled some of my funds and I go bankrupt; will I get in trouble?

Usually this is not a problem, so if you are a gambler, don’t worry. What the trustee doesn’t like is inconsistency here. In other words, you have never taken a chance in your life and all of a sudden you lost $50,000 on the horses, then you might have some explaining to do, of course, because it just doesn’t add up.

Can my bankruptcy be actioned the phone?

Yes. We understand you are busy. If you have a phone we can help you; simply call us on 1300 795 575.

What if I’m living abroad; can I still go bankrupt?

Yes. This is feasible. It requires some emails back and forth but it can be performed.

Can I include my overseas debts in my bankruptcy?

Yes. If an individual originally living in another country is now residing in Australia then files for bankruptcy and they have a debt incurred in that foreign country, you just register that debt on the paperwork.

In many cases the creditor overseas will eliminate the debt. It is possible and legal for them, however, to reject your application, and if you return to that country you may be subject to their bankruptcy laws.

How will the trustee know what assets I have?

There are a few ways the trustee can discover, and the most ideal and quickest way is for you to tell them when we do the paperwork. There is also a government website which has major assets listed also. You ought to get some advice about assets; be careful.

Can I keep an inheritance if I declare bankruptcy?

This is tricky and you will require the correct advice, so if you need more information about inheritances phone us on 1300 795 575.

Will I lose my Pension or Workers Compensation payments if I file for bankruptcy?

No. The income thresholds are the same for everyone so no matter how you earn your income you have to earn about $50,000 per year before your income will be impacted by bankruptcy.

Will I have the ability to keep my tax returns once I’m bankrupt?

Yes, if you owe the tax office money. Put simply, if one of your debts is tax debt, then no, the tax office will keep the money you owe them.

No, if you do not owe the tax office money. Your income tax return is viewed as take-home pay, so if you are beneath the threshold amount you can earn while bankrupt then you will get your entire income tax return back.

What about child support ?

If you are required to pay child support, this amount will be deducted from your net income, so what you get to keep after you pay your tax and then child support is considered net income. That is why in the world of bankruptcy net income numbers are always quoted.

Can I buy shares and make investments while I’m bankrupt?

Yes, you are allowed even while you are bankrupt, but the trustee will get them off you, as they are considered an asset.

What assets can I keep if I go bankrupt?

You can keep practically everything except big things like houses, cars, shares and inheritances. Even things like houses and cars may be able to be kept. Just give us a call before you make any rash decisions on 1300 795 575 for Bankruptcy Experts Shellharbour.

Call: 1300 795 575

Declaring Bankruptcy Townsville, Bankruptcy Townsville, Company Liquidation, Liquidators Townsville, How to File for Bankruptcy

We’ll call you:

No obligation, first consultation free.
Simply fill out the following form for a call back:

Email (required)

Name (required)

Phone (required)