If you reside in the Shellharbour area and you are struggling with your Personal or Business Debts?
Then give Bankruptcy Experts Shellharbour a call. If your debts completely out of control, then maybe the thought of bankruptcy has gone through your mind, and now you have finally taken the next and most challenging step figuring out whether or not bankruptcy is ideal 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 entraped and like you have no alternatives.
You Can Be 100 % Debt Free!
Can you imagine a future free from creditors phone calls and enjoying the mail again. There are a handful of things you need to know before you make that very hard decision. Firstly, the sooner you act the more alternatives you will have.
5 Questions you must acknowledge before you go bankrupt.
Second of all, there are 5 significant questions you must have an answer to before you declare bankruptcy, if you would like to know what they are feel free to download the free e-book on the right hand side of this page it will explore these questions thoroughly and give you assurance that you are doing the right thing.
Is Bankruptcy my only choice?
No! There are several choices available to you. Below is a diagram summarizing the pros and cons of various debt solutions, this chart is by no means comprehensive but it will permit you to make an informed decision.
What is a Personal Insolvency Agreement?
This is flexible agreement between you and your lenders. It is managed through a trustee who administers to how much you need 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 repay 30 to 70 cents in the dollar to your creditors
- It could be a very a quick process.
- May have the ability 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 several years to pay off the debt
- It still affects your credit score for 7 years the same as bankruptcy
- You can not be a company director until the debt is worked out
- You are required to meet in person your creditor face to face
- Your details will be published in a local newspaper.
What is a Debt Agreement?
A debt agreement allows 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 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 essential assets.
Cons – Debt Agreement.
- There is an upfront charge to begin.
- You will have to be approved. If you don’t earn enough you will be denied.
- If you don’t make your repayments the agreement could be canceled 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 approved 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 deal with my debts?
The reason you find a barrage of expensive advertisements on the television in the Shellharbour area urging you to sign up for one of these options is there is lots of cash in it for the business that manage to them. You will notice if you haven’t already that every business tends to give (biased) advice according to the program that they offer. For instance Debt Agreement Companies ridicule bankruptcy companies and so it goes with much of the financial services industry.
Should I consider a Debt Consolidation Loan?
There is the occasional scenarios where a debt consolidation loan is the right option. Ordinarily however the issue with them is all it is really doing is bundling 5-15 various loans into one huge loan. If you are having a hard time to pay all your different loans now why do you think it will be amazingly easier to have one enormous debt. Just to make it all even worse you generally have to pay up front for the luxury of this choice.
If you want 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 go bankrupt can I keep my house?
Oftentimes the answer is yes. If this is a serious concern for you then the best way to get the answer is to contact us here at Bankruptcy Experts Shellharbour on 1300 795 575 and once we have comprehended your predicament we can give you a clear picture over the phone.
Virtually everyone is psychologically connected to their house, its where the kids have grown, its where you enjoy life on a day to day basis. People generally think its an inevitable repercussion of bankruptcy and because of this they pressure themselves to the brink of insanity to not lose the family home.
Will the bank let me keep my house even though I’m a bankrupt?
Why you may ask would the bank want bankrupt customers wouldn’t they choose 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 out of you, day in and day out, provided that you maintain to date with your repayments 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 plenty of equity in your home the trustee will force you and the bank to sell your home.
What factors determine if I will lose my home?
If you are up to date with your repayments then the greatest issue is equity. The trustee has a duty to gather up as much money to help pay your bills once you file for bankruptcy. Equity is the secret here. If you have $300,000 equity in your house 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?
Normally a registered valuer from the Shellharbour area is the most effective and safest way to identify your current equity position, before you race out and get the local real estate agent to give you a micky 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 feel free to download “The Big 5” e-book.
What if my partners name is on the house loan?
Another notable issue is ownership, oftentimes houses are bought in joint names. In other words a couple may have purchased a house 50/50 using both salaries to make the repayments. If one partner declares bankruptcy and the other owner doesn’t, the equity is only factored on the 50 % of the house.
So basically if you have a home in joint names and your total equity position is $100,000 then your actual equity is fifty percent of that $50,000.
It seems like I have very few choices when if comes to my house?
No not really there are a number of choices readily available to you when it comes to your house or some other asset when declaring bankruptcy. You will want to get the right assistance about this however, getting it wrong could be deadly. If you have questions feel free to contact us about your house on 1300 795 575.
BANKRUPTCY AND EMPLOYMENT
Will my employer be informed?
Who will be told my bankruptcy?
There are four groups of people that will know that you are bankrupt. 1. Individuals 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 release for them to access your credit file. 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 need to pay to see if someone is bankrupt on it.
At Bankruptcy Experts Shellharbour we are fully conscious that there is still a stigma about bankruptcy we appreciate this concern in fact we can help make sure that if you declare yourself bankrupt you will not need 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 simple and quick. In fact the whole process will only take a handful days. It permits ordinary people 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 go bankrupt?
The answer to the question is maybe. The trouble with some professions 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 challenging for you.
What I would undoubtedly advise is that you do your own research here, do the groundwork and investigate that process first before filing for bankruptcy because that may help you make a decision. Check if your job is on the list below. If it is, I ‘d talk to them personally and describe your situation. Some organizations won’t have a problem with your bankruptcy provided that it wasn’t accompanied by shady or doubtful behavior.
If you think you employment may be impacted by your possible bankruptcy phone us here at Bankruptcy Experts Shellharbour on 1300 795 575.
BANKRUPTCY AND INCOME
Will my earnings be impacted if I go bankrupt?
The answer to the question is possibly. The very first thing you ought to know about going bankrupt is there is no limit on just how much you can earn. However, I will indicate that your income is a considerable factor when working through whether you need to go bankrupt.
The very first thing you have to know is 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 annually (irrespective 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 considered 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 each year and you have no dependants living with you then your revised net income threshold will be $55,332.10.
If you need more information about your income thresholds go forward and download “The Big 5” E-book. there are some cases as a result of 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 keep?
Below is laid out for you the base amounts that you exclude of your incomes during the period of your bankruptcy. 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 while bankrupt, then of course it’s also after net (after tax) business expenses.
Your net income will be adjusted to consider things like salary sacrifice and excessive superannuation payments etc. Your bankruptcy trustee will have to determine your actual net income according to the bankruptcy rules.
The income threshold figures are also per person, and they are adjusted by the government every March and September to allow for 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 partner can earn. Your partner 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 declare bankruptcy, 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 person in the home.
Who is considered a dependent?
In the case of 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 declare bankruptcy?
The short answer is you don’t need to but you do will want to get the right assistance. Corporate insolvency laws are very complicated and you need to tread carefully if you intend to continue to be self-employed.
You may already recognize that you can no longer be the director of a Pty Ltd Company if you are bankrupt, nevertheless that doesn’t inevitably 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 eliminate your business debts so you can get a new beginning.
Should I put my company into liquidation?
One of the main reasons you may wish to consider liquidation in contrast to bankruptcy is because if you liquidate your company, it doesn’t inevitably mean you need to declare bankruptcy. In Australia, businesses that become insolvent have a few choices, such as liquidation, voluntary administration and so forth. If you would like to know more about liquidation and company re-structuring, visit the next page of this website, as there is a lot more about it there and or download “The Big 5” e-Book. Don’t forget, it’s the individuals who declare bankruptcy, not businesses.
This is a perplexing area, so get some skilled advice on this one if you have an enterprise. Ordinarily speaking, the debts in a business and personal debts go together when a business owner declares bankruptcy.
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 has an effect on their capacity 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 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 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” 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 business owner; just get the appropriate advice and call Bankruptcy Experts Shellharbour now 1300 795 575.
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