Common Bankruptcy Myths
Will I lose my property if I declare bankruptcy?
This is not always the case. If there is equity in your property that amount will need to be paid to your Trustee, however, if there is a shortfall to your mortgagee, then under most circumstances you are able to retain your property provided you keep up the mortgage payments.
Will I lose my job if I declare bankruptcy?
Unless your employment contract stipulates that you cannot be subject to personal insolvency, you will not lose your job. However, there are some laws in place that restrict a bankrupt from maintaining their employment for example, a real estate agent or aged care nurse.
Can I keep my car?
You are able to keep your vehicles up to the threshold value of $7,700. If you have finance on your vehicle, you should be able to keep it as long as the equity is below $7,700 and you continue to make the finance payments.
Bankruptcy is the end
This is not the case. The stigma associated with bankruptcy has changed over the years and bankruptcy is now seem as an option to allow you a fresh start to rebuild your financial position.
Will it always be on my credit file?
Your bankruptcy will remain on the credit file for 5 years from the date which you became bankrupt or 2 years from when your bankruptcy ends, whichever is the earliest.
All my debts will be wiped
This is not the case. Most of your debts will be extinguished as part of your bankruptcy, however, there are some exceptions which include:
- HECS debts
- Child support
- Fines imposed by a Court
I am not able to obtain any credit whilst bankrupt
As a bankrupt you can obtain credit or hire or leased/goods up to a limit of $5,546.