How do I Become Bankrupt?
There are two ways individuals facing financial difficulty become bankrupt. Firstly if you have a debt of any amount that you cannot pay, you can apply to become voluntary bankrupt. Secondly if creditors have tried to unsuccessfully to recover debts that you owe that total at least $5000, the creditor can force you into bankruptcy.
Bankruptcy is a legal process that releases a person from almost all of their debts and lasts three years from the day it is declared.
Once an individual declares bankruptcy, the Bankruptcy Act precludes creditors from taking any further action against the debtor and the creditors must now deal directly with the trustee.
Financially the consequences of bankruptcy may adversely impact you immediately and into the future, however it can also be a new start. Depending on your individual circumstances bankruptcy may have a beneficial impact on your life and enable you start have a new start financially. Conversely bankruptcy may have significant consequences for you to obtain credit, limit your future employment options and loss of significant assets.
A common misconception about declaring bankruptcy is that you will lose everything. In Australia this is far from the truth. For most people very little in their life changes at all. You can still own a vehicle to the current value of $7,700 and household effects such as furniture are exempt. The only things you need to be aware of are the threshold amounts for assets and income.
Bankruptcy generally does not prevent you from working. However, if you are engaged in particular trades or professions there may be certain restrictions imposed by professional associations or licensing authorities. You should contact your professional association or licensing authority to confirm whether there is any effect on your membership or ability to practice a particular trade.
Nobody plans for debt to get out of control, Bankruptcy laws were made because the government knows that good people can hit bad times. During bad times good people need help.
At E-Bankruptcy we offer a cost effective, online bankruptcy and alternative solutions for people in financial trouble. That solution is eBankruptcy.