If you live in the Northern Rivers area and you are having problem with your Personal or Business Debts?
Then give Bankruptcy Experts Northern Rivers a call. If your debts completely out of control, then maybe the idea of bankruptcy has gone through your mind, and now you have finally taken the next and most challenging step discovering whether or not bankruptcy is suitable for you. Just the prospect of it is hard enough without having it become a reality. We understand that there is a tremendous sense of failure in this particular process. Maybe you are feeling entraped and like you have no alternatives.
You Can Be 100 % Debt Free!
Can you conceive of a future devoid of creditors phone calls and looking forward to the mail again. There are a couple of things you need to know before you make that very difficult decision. First of all, the sooner you act the more alternatives you will have. 5 Questions you must address before you declare yourself bankrupt. Second, there are 5 essential questions you must have an answer to before you file for bankruptcy, if you want to know what they are don’t hesitate to download the free-Book on the right hand side of this page it will explore these questions at length and give you confidence that you are doing the right thing.
Is Going bankrupt my only choice?
No! There are several choices available to you. Below is a graph describing the advantages and disadvantages of various debt solutions, this chart is by no means comprehensive but it will make it possible for you to make an intelligent decision.
What is a Personal Insolvency Agreement?
This is flexible agreement between you and your lenders. It is administered through a trustee who carries out to just how much you have to pay and when etc. Once those conditions have been met you are then free to start again with a fresh start.
Why you may wish 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 can be a very a quick process.
- May have the ability to keep important assets.
- The debtors assets are independently handled
- Lower legal costs connected with court proceedings
Cons – Personal Insolvency Agreements
- You are not free until you have paid the entire debt
- It may take many years to clear up the debt
- It still impacts your credit rating for 7 years the same as bankruptcy
- You cannot be a company director until the debt is worked out
- You are required to meet with your creditor in person
- Your details will be published in a local paper.
What is a Debt Agreement?
A debt agreement makes it possible for 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 wish to know more please get in touch with us on 1300 795 575
Pros – Debt Agreement
- Avoid Bankruptcy
- Stops creditors – can not take any further actions to recoop their debts;.
- You may get to keep important assets.
Cons – Debt Agreement.
- There is an upfront expense to begin.
- You will have to be approved. If you don’t make enough you will be turned down.
- If you don’t make your repayments the agreement may be terminated then the creditors can resume recovering of their debts;.
- The debtor details will turn up on the National Personal Insolvency.
- Index (NPII) from the date that the debt agreement proposal was agreed to by ITSA.
- It also 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 firms say Debt Agreements or Personal Insolvency Agreements are the way to remove my debt?
The reason you find plenty of expensive commercials on TV in the Northern Rivers area encouraging you to go for one of these alternatives is there is lots of money in it for the business that administer to them. You will notice if you haven’t already that every firm tends to give (biased) advice depending on the program that they provide. For instance Debt Agreement Companies ridicule bankruptcy companies and so it goes with much of the financial services industry.
Should I take into consideration a Debt Consolidation Loan?
There is the occasional conditions where a debt consolidation loan is the way to go. Normally however the issue with them is all it is actually doing is bundling 5-15 different debts into one large debt. If you are straining to pay all your different loans now why do you think it will be magically easier to have one enormous debt. Just to make it all worse you usually have to pay up front for the pleasure of this option. If you wish to get some clarification on this simply phone us on 1300 795 575 or go and download “The Big 5” e-Book.
BANKRUPTCY AND THE FAMILY HOME
If I go bankrupt can I keep my home?
In most cases the answer is yes. If this is a significant worry for you then the best way to get the answer is to contact us here at Bankruptcy Experts Northern Rivers on 1300 795 575 and once we have learnt about your situation we can give you a clear picture over the phone. Essentially everyone is emotionally connected to their house, its where the children have grown, its where you enjoy life on a day to day basis. People typically think its an inescapable repercussion of bankruptcy and because of this they push themselves to the brink of insanity to not lose the family home.
Will the bank permit me to keep my house even though I’m a bankrupt?
Why you might ask would the bank want bankrupt clients wouldn’t they want to sell your house and not take the risk? The bank that has kindly lent you the cash 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 determines that there is enough equity in your home the trustee will force you and the bank to sell the house.
What factors determine if I will lose my house?
If you are up to date with your payments then the greatest issue is equity. The trustee has a responsibility to gather as much money to help pay your bills once you go bankrupt. Equity is the trick here. If you have $300,000 equity in your home and you have $100,000 worth of debt and no other way to pay the debt then the trustee sees your equity as a way to repay your debt, so the trustee will sell your house repay the debt and give you whatever is left over.
How is equity determined?
Generally a registered valuer from the Northern Rivers area is the most effective and safest way to determine your current equity position, before you rush out and get the local real estate agent to give you a Mickey Mouse evaluation contact us for how to go about this process so that you can have peace of mind 1300 795 575. Or for a better illustration about how your house will be considered do not hesitate to download “The Big 5” e-book.
Suppose my partners name is on the home loan?
Another significant factor is ownership, oftentimes houses are bought in joint names. Put simply a couple may have bought a house 50/50 using both salaries to make the monthly payments. If one partner declares bankruptcy and the other party doesn’t, the equity is only factored on the 50 % of the property. So in other words if you have a house in joint names and your total equity position is $100,000 then your actual equity is fifty percent of that $50,000.
It sounds like I have very few alternatives when if comes to my house?
No not really there are several options readily available to you when it comes to your house or some other asset when going bankrupt. You ought to get the right assistance about this however, getting it wrong could be fatal. If you have questions feel free to contact us about your house on 1300 795 575.
BANKRUPTCY AND EMPLOYMENT
Will my employer be advised?
Who will learn about my bankruptcy?
There are four groups of people that will be told that you are bankrupt. 1. The people you tell. 2. Your creditors or people you owe money to. 3. The people 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 history. You only ever do this when you apply for a loan. 4. You will be listed on the National Insolvency Index it on the net somewhere, its hard to find and you have to pay to see if someone is bankrupt on it. At Bankruptcy Experts Northern Rivers we are totally aware that there is still a stigma about bankruptcy we are aware of this concern as a matter of fact we can help make sure that if you declare yourself bankrupt you will not have to go to court or get your name in the papers or be publicly made out to be a criminal. We can help ensure bankruptcy is simple and quick. In fact the whole process will only take a handful days. It permits the average punter to get out of debt and on with their lives. For more detailed information about employment download “The Big 5” e-Book.
Will I lose my job if I file for bankruptcy?
The answer to the question is maybe. The concern with some line of works isn’t that you can’t do the job any longer, it’s more an issue of professional bodies or associations that view bankruptcy in a dim light and can make it troublesome for you. What I would propose is that you do your own research here, do the homework and review that process first prior to filing for bankruptcy because that may help you choose. Check if your job is on the chart below. If it is, I ‘d get in touch with them personally and discuss your situation. A few affiliations won’t have a problem with your bankruptcy as long as it wasn’t accompanied by shady or questionable behavior. If you think you employment may be affected by your possible bankruptcy call us here at Bankruptcy Experts Northern Rivers on 1300 795 575.
BANKRUPTCY AND INCOME
Will my income be affected if I go bankrupt?
The answer to the question is could be. The first thing you ought to know about going bankrupt is there is no limitation on just how much you can earn. However, I will point out that your income is a significant factor when working through whether you have to declare bankruptcy. The first thing you need 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 each year. A dependant is someone who resides with you and earns less than $3,124 annually (irrespective their age). You can apply for a hardship variation that raises the threshold amount, if you have costs 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 considered in bankruptcy, if you receive child support that is not factored in as income. If you pay child support this will be also taken into consideration, for instance if you pay $5,000 child support annually and you have no dependants residing with you then your revised net income threshold would be $55,332.10. If you need more information about your income thresholds shoot ahead and download “The Big 5” E-book. there are some cases due to income that it is not an economically viable option to declare bankruptcy because you earn way too much in comparison to the debt you have. Just how much of my pay can I retain? Below is set out for you the base amounts that you keep out of your incomes during the period of your bankruptcy. The Threshold Amount that you can keep is basically your in the hand income after tax and child support (if applicable) is deducted. If you’re in your own business whilst bankrupt, then naturally it’s also after net (after tax) business expenses. Your net income will be adjusted to take into account things like salary sacrifice and excessive superannuation payments etc. Your bankruptcy trustee needs to determine your actual net income according to the bankruptcy rules. The income threshold amounts are also per person, and they are adjusted by the government every March and September to take into account the movements in the cost of living. With no dependents your net income may be $52,543.40 net per per year, i.e. that’s approximately $1,010.45 net per week in the hand pay. This is your spending money. It’s all yours, it’s what you can keep, and so everything over that is split 50/50 with your bankruptcy trustee. With 1 dependent your net income can be $62,001.21 net per annum, i.e. approximately $1,192.33 net per week in the hand pay. This is your pocket money. It’s all yours, it’s what you can keep, and so anything over that is split half and half with your bankruptcy trustee. With 2 dependents your net income may be $66,730.12 net per per year, i.e. approximately $1,283.27 net per week in the hand pay. This is your pocket money. It’s all yours, it’s what you can keep, and so everything over that is split 50/50 with your bankruptcy trustee. With 3 dependents your net income may be $69,357.29 net per per year, 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, consequently anything over that is split 50/50 with your bankruptcy trustee. With 4 dependents your net income can be $70,408.16 net per per year, 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 4 + dependents your net income can be $71,459.02 net per annum, i.e. around $1,374.21 net per week in the hand pay. This is your pocket 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 spouse can earn. Your spouse can earn a million dollars and they will not be required to contribute to your debts.
What if my spouse/partner and I both need to declare bankruptcy?
If a husband and wife each go bankrupt, and say that they’ve got no dependants, then they can each earn $1,010.45 net. A practical 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 $3,343 each year.
BANKRUPTCY AND SELF EMPLOYMENT
Will I lose my company if I go bankrupt?
The simple answer is you don’t have to but you do will want to get the right advice. Company insolvency laws are very complicated and you need to tread carefully if you would like to continue to be self-employed. You may already know that you can no longer be the director of a Pty Ltd Company if you are bankrupt, even so 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 wipe out your business debts so you can get a fresh start.
Should I put my company into liquidation?
One of the main reasons you may wish to consider liquidation rather than bankruptcy is because if you liquidate your company, it doesn’t automatically mean you need to go bankrupt. In Australia, businesses that become insolvent have a few alternatives, such as liquidation, voluntary administration and so forth. If you want to know more about liquidation and company re-structuring, visit the next page of this website, as there is much more about it there and or download “The Big 5” e-Book. Keep in mind, it’s the individuals who declare bankruptcy, not businesses. This is a perplexing area, so get some expert advice on this one if you have an enterprise. Generally speaking, the debts in a business and personal debts go 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 impacts their capability to run the business because of the licensing issues discussed in chapter two. For instance, if you run a building company, your license will be suspend once you’re bankrupt and consequently you can no longer trade without that license.
Isn’t it illegal to run a similar business after bankruptcy?
It can be. There are considerations when and if you go bankrupt as a business owner: you can not run up heaps of debt in your business, then go bankrupt and then open the doors the next day like nothing has happened. There are laws in place to prevent what is called “phoenix companies” rising up out of the ashes of an old company. Don’t get overly pressured about what you can and can’t do as a company owner; just get the appropriate advice and call Bankruptcy Experts Northern Rivers today 1300 795 575.