If you live in the Herveybay area and you are having problem with your Personal or Business Debts?
Then give Bankruptcy Experts Herveybay a call. If your debts are out of control, then possibly the thought of bankruptcy has crossed your mind, and now you have finally taken the next and most challenging step discovering whether or not bankruptcy is best for you. Just the prospect of it is hard enough having it become a fact. We understand that there is an overwhelming sense of failure in this process. Maybe you are feeling stuck and like you have no choices.
You Can Be 100 % Debt Free!
Can you think of a future free from creditors harrassing phone calls and looking forward to the mail again. There are a couple of things you should know before you make that very tough decision. Firstly, the sooner you act the more choices you will have.
5 Questions you must answer before you file for bankruptcy.
Secondly, there are 5 crucial questions you must have an answer to before you file for bankruptcy, if you want to know what they are feel free to download the free e-book on the right hand side of this web page it will discuss these questions in detail and give you assurance that you are doing the right thing.
Is Going bankrupt my only option?
No! There are several options available to you. Below is a graph detailing the benefits and drawbacks of various debt options, this chart is by no means all-encompassing but it will enable you to make a well informed decision.
What is a Personal Insolvency Agreement?
This is flexible agreement between you and your lenders. It is managed through a trustee who carries out to how much you have to pay and when etc. Once those conditions have been met you are then free to begin again with a new beginning.
Why you may want to consider a Personal Insolvency Agreement
Pros – Personal Insolvency Agreements
- Avoid bankruptcy
- Possibly limit liability to make income contributions
- You pay back 30 to 70 cents in the dollar to your creditors
- It could be a very a quick process.
- May get to keep important assets.
- The debtors assets are independently managed
- Lower legal costs connected with court proceedings
Cons – Personal Insolvency Agreements
- You are not free until you have paid debt
- It may take many years to pay off the debt
- It still has an effect on your credit report for 7 years the same as bankruptcy
- You can’t be a company director until the debt is paid off
- You are required to meet in person your creditor in person
- Your details will be published in a local newspaper.
What is a Debt Agreement?
A debt agreement enables a debtor to participate in an arrangement with their creditors to satisfy their debts without being made bankrupt.
Can I Enter into a Debt Agreement?
You can’t enter into a Debt Agreement if you have been bankrupt, or you are currently already in a debt agreement. There are also income restrictions, property value and unsecured debt value restrictions, If you need to know more please contact us on 1300 795 575
Pros – Debt Agreement
- Avoid Bankruptcy
- Stops creditors – can not take any further actions to recover their debts;.
- You may get to keep essential assets.
Cons – Debt Agreement.
- There is an upfront charge to commence.
- You have to be approved. If you don’t earn enough you will be declined.
- If you don’t make your payments the agreement could be canceled then the creditors can resume recovering of their debts;.
- The debtor details will appear on the National Personal Insolvency.
- Index (NPII) from the date that the debt agreement proposal was agreed to by ITSA.
- It still affects your credit rating for 7 years the same as bankruptcy.
- Nothing changes with secured creditors rights they may repossess if the debtor is in default.
Why do some business say Debt Agreements or Personal Insolvency Agreements are the way to go?
The reason you find loads of expensive ads on the TV in the Herveybay region urging you to sign up for one of these alternatives is there is lots of cash in it for the companies that provide to them. You will notice if you haven’t already that every business tends to give (biased) advice depending on the program that they offer. As an example Debt Agreement Companies ridicule bankruptcy companies and so it goes with much of the financial services industry.
Should I think about a Debt Consolidation Loan?
There is the occasional conditions where a debt consolidation loan is the way to go. Normally however the problem with them is all it is actually doing is bundling 5-15 various loans into one huge debt. If you are struggling to pay all your different loans now why do you think it will be amazingly easier to have one enormous bill. Just to make it all even worse you usually have to pay up front for the luxury of this deal.
If you would like to get some advice on this simply call us on 1300 795 575 or go and download “The Big 5” e-Book.
BANKRUPTCY AND THE FAMILY HOME
If I file for bankruptcy can I keep my home?
Generally the answer is yes. If this is a significant worry for you then the best way to get the solution is to contact us here at Bankruptcy Experts Herveybay on 1300 795 575 and once we have understood your situation we can give you a clear picture over the phone.
Practically everyone is emotionally connected to their home, its where the children have grown up, its where you enjoy life on a day to day basis. People commonly think its an unavoidable repercussion of bankruptcy and because of this they push themselves to the brink of madness to not lose the family home.
Will the bank permit me to keep my house despite the fact that I’m bankrupt?
Why you may ask would the bank want bankrupt customers wouldn’t they wish to sell your house and not take the risk? The bank that has generously lent you the money for your house is making good money every month in interest from you, day in and day out, as long as you keep up to date with your payments then the bank wants you in there at all costs. Ultimately however it’s not the bank’s call if the trustee decides that there is lots of equity in your home the trustee will force you and the bank to sell your home.
What things determine if I will lose my house?
If you are up to date with your repayments then the greatest issue is equity. The trustee has a duty to gather as much money to help pay your bills once you go bankrupt. Equity is the ticket here. If you have $300,000 equity in your house and you have $100,000 worth of debts and no other way to pay the debt then the trustee sees you equity as a way to pay back your debt, so the trustee will sell your house pay back the debt and give you whatever remains.
How is equity determined?
Normally a registered valuer from the Herveybay area is the most effective and safest way to determine your current equity position, before you race out and get the local real estate agent to give you a Mickey Mouse evaluation call us for how to go about this process so that you can have peace of mind 1300 795 575. Or for a better exposition about how your house will be considered do not hesitate to download “The Big 5” e-book.
What if my partners name is on the home loan?
Another significant issue is possession, in many cases houses are bought in joint names. In other words a couple may have bought a house 50/50 using both salaries to make the monthly payments. If one party files for bankruptcy and the other party doesn’t, the equity is only factored on the 50 % of the house.
So in other words if you have a home in joint names and your total equity position is $100,000 then your actual equity is half of that $50,000.
It sounds like I have very few choices when if comes to my house?
No not really there are many options readily available to you when it comes to your house or any other asset when going bankrupt. You will need to get the right advice about this however, getting it wrong could be fatal. If you have questions feel free to phone us about your house on 1300 795 575.
BANKRUPTCY AND EMPLOYMENT
Will my employer be informed?
Who will learn about my bankruptcy?
There are four groups of people that will learn that you are bankrupt. 1. Individuals you tell. 2. Your creditors or people you owe money to. 3. Individuals that see your credit file while your bankrupt. The only way that will happen is if you sign a privacy form for them to access your credit report. You only ever do this we you apply for a loan. 4. You will be listed on the National Insolvency Index it online somewhere, its hard to find and you have to pay to see if someone is bankrupt on it.
At Bankruptcy Experts Herveybay we are entirely mindful that there is still a stigma about bankruptcy we are aware of this concern as a matter of fact we can help ensure that if you declare yourself bankrupt you don’t have to go to court or get your name in the newspapers or be publicly made out to be a criminal. We can help ensure bankruptcy is easy and quick. In fact the whole process will only take a few days. It enables ordinary people to get out of debt and on with their lives. For more detailed information about your job download “The Big 5” e-Book.
Will I lose my job if I file for bankruptcy?
The answer to the question is in some cases. The trouble with some vocations isn’t that you can’t do the job any longer, it’s more an issue of professional bodies or associations that see bankruptcy in a dim light and can make it challenging for you.
What I would undoubtedly suggest is that you do your own homework here, do the homework and go through that process first before filing for bankruptcy because that may help you decide. Check if your specialty is on the chart below. If it is, I ‘d get in touch with them personally and explain your circumstance. Some affiliations won’t have a problem with your bankruptcy as long as it wasn’t accompanied by shady or doubtful behavior.
If you think you employment may be impacted by your possible bankruptcy call us here at Bankruptcy Experts Herveybay on 1300 795 575.
BANKRUPTCY AND INCOME
Will my earnings be impacted if I go bankrupt?
The answer to the question is perhaps. The very first thing you need to know about going bankrupt is there is no limitation on how much you can earn. However, I will mention that your income is a significant consideration when wading whether you need to go bankrupt.
The very first thing you have to know is just how much you can earn before you start repaying money to your creditors via your trustee (see chart below).
Net income is the pre-tax / in the hand amount you earn annually. A dependant is someone who lives with you and earns less than $3,124 each year (regardless of their age).
You can apply for a hardship variation that raises the threshold amount, if you have expenses such as medical, child care, significant travel to and from work, or a circumstance where your spouse used to work but is no longer able to add to the household income.
Child support is always taken into consideration in bankruptcy, if you receive child support that is not factored in as income. If you pay child support this will be also considered, for example if you pay $5,000 child support every year and you have no dependants living with you then your revised net income limit would be $55,332.10.
If you need more information about your income thresholds go on and download “The Big 5” E-book. there are some cases due to income that it is not an economically viable option to file for bankruptcy because you earn way too much in comparison to the debt you have.
Just how much of my pay can I keep?
The Threshold Amount that you can keep is basically your net income after tax and child support (if applicable) is deducted. If you’re in business whilst bankrupt, then of course it’s also after net (after tax) business expenses.
Your net income could be adjusted to take into account things like salary sacrifice and excessive superannuation payments etc. Your bankruptcy trustee has to determine your real net income according to the bankruptcy rules.
The income threshold figures are also per person, and are adjusted by the Government every March and September to allow for the movements in the cost of living.
With no dependants your net income can be $52,543.40 net per annum, i.e. that’s an average of $1,010.45 net per week take home pay. This is your spending money. It’s all yours. It’s what you can keep, and so anything over that amount is split 50/50 with your bankruptcy trustee to be paid to your creditors.
With 1 dependant your net income can be $62,001.21 net per annum, i.e. an average of $1,192.33 net per week take home pay. This is your spending money. It’s all yours, it’s what you can keep, and so anything over that is split 50/50 with your bankruptcy trustee.
With 2 dependants your net income can be $66,730.12 net per annum, i.e. an average of $1,283.27 net per week take home pay. This is your spending money. It’s all yours, it’s what you can keep, and so anything over that is split 50/50 with your bankruptcy trustee.
With 3 dependants your net income can be $69,357.29 net per annum, i.e. an average of $1,333.79 net per week take home pay. This is your spending money. It’s all yours, it’s what you can keep, and so anything over that is split 50/50 with your bankruptcy trustee.
With 4 dependants your net income can be $70,408.16 net per annum, i.e. an average of $1,354.00 net per week take home pay. This is your spending money. It’s all yours, it’s what you can keep, and so anything over that is split 50/50 with your bankruptcy trustee.
With more than 4 dependants your net income can be $71,459.02 net per annum, i.e. an average of $1,374.21 net per week take home pay. This is your spending money. It’s all yours, it’s what you can keep, and so anything over that is split 50/50 with your trustee.
If you believe that your condition is more challenging, then please get competent advice. If you have a particular income question just call us on 1300 795 575.
What can my partner earn if I go bankrupt?
There is no limit to what your loved one can earn. Your other half can earn a million dollars and they will not be required to contribute to your debts.
What if my spouse/partner and I both should go bankrupt?
If a husband and wife each declare bankruptcy, and say that they’ve got no dependants, then they can each earn $939.23 net. A simple way to understand it is the same income rules apply for each individual in the home.
Who is considered a dependent?
When it come to bankruptcy a dependent is anyone you support who earns less that $3,197 each year.
BANKRUPTCY AND SELF EMPLOYMENT
Will I lose my small business if I go bankrupt?
The simple answer is you don’t have to but you do have to get the right guidance. Corporate insolvency laws are very complicated and you will need to tread carefully if you wish to continue to be self-employed.
You may already understand that you can no longer be the director of a Pty Ltd Company if you are bankrupt, nevertheless that doesn’t automatically mean you can’t run your own business and employ staff etc.
What if my business has serious debts?
As a part of your bankruptcy we can help you erase your business debts so you can get a clean slate.
Should I put my company into liquidation?
Just one of the main reasons you may intend to consider liquidation instead of bankruptcy is because if you liquidate your company, it doesn’t essentially mean you need to declare bankruptcy. In Australia, businesses that become insolvent have a few alternatives, such as liquidation, voluntary administration and so on. If you wish to know more about liquidation and company re-structuring, go to the next page of this website, as there is a lot more about it there and or download “The Big 5” e-Book. Remember, it’s the individuals who declare bankruptcy, not businesses.
This is a sophisticated area, so get some expert advice on this one if you have a business. Commonly speaking, the debts in a business and personal debts work together when a company owner goes bankrupt.
What impact will bankruptcy have on my business?
A restriction that applies when you are bankrupt as a business owner is that you can be in your own business as a sole trader only. For some business owners, bankruptcy influences their capability to run the business because of the licensing issues discussed in chapter two. As an example, if you run a building company, your license will be suspend once you’re bankrupt and therefore you can no longer trade without that license.
Isn’t it illegal to run a similar business after bankruptcy?
It could be. There are considerations when and if you go bankrupt as a business owner: you can not rack up heaps of debt in your business, then declare bankruptcy and then open the doors the next day like nothing has happened. There are laws in place to prevent what is called “phoenix companies” popping up out of the ashes of an old company.
Don’t get overly stressed about what you can and can’t do as a business owner; just get the correct advice and call Bankruptcy Experts Herveybay today 1300 795 575.