When it involves Bankruptcy, there are 2 kinds of individuals– those who have made a decision to declare bankruptcy and those individuals declared insolvent by others (Their creditors).

When it comes to Bankruptcy in Newcastle, typically individuals aren’t aware that there can be both voluntary, and involuntary bankruptcy– and this is very important because often individuals don’t become aware that others can declare them bankrupt– and that if this happens you have certain rights and’ obligations attached.

Involuntary bankruptcy:

Involuntary bankruptcy occurs when a person you owe money to calls for the court to declare you insolvent. This will result in you being given with a notice that, normally when you obtain one of these kinds of notices, you have 21 days to pay all the debt. If you don’t, then the lender goes back to the court and asks the court to supply a sequestration order that declares you insolvent. During this time you will have a brief window in which you can argue and put your case forward concerning the reason why it really should not progress to the next degree and the reason why you ought to not be declared insolvent. But once the determination has been made, you will be bankrupt and going through the same measures as people who took that path freely.

However, when it concerns Bankruptcy you can picture that the involuntary process is full of far more stress, worry and concern as other people are taking control of your life. My most important tip with Bankruptcy and involuntary bankruptcy is that if you think that it could happen, get specialist advice on bankruptcy as quickly as possible, even if you are just worried about financial debt and fear that it could continue to escalate. I am sure that you can imagine that it is much better to realise what you can and can’t do before getting pushed into that scenario. Once you are insolvent, it’s normally far too late to take action.

What next?

Well if you have been declared insolvent, you won’t really have numerous options but to move through the process and you will certainly want to get competent advice to make sure you are declaring correctly, not breaking any guidelines, and will have the bankruptcy discharged as quickly as achievable.

The good news is that in Australia the arrangements for bankruptcy are effectively really generous: you could go bankrupt owing millions of dollars and after 3 years it’s all completed with no strings attached. Compared to nations like the United States, our bankruptcy laws are rather good.

I don’t pretend to understand why that is, but a couple of hundred years ago debtors went to jail. Nowadays I suppose the government thinks that the faster it can get you back on your feet working and paying off tax, the better. It makes much more sense than locking you up which costs the taxpayer anyway.

Insolvency will wipe away the huge majority of your different debts, (including tax debts to the ATO) but remember the few exemptions- the main ones being Centrelink Debts, Court Fines like parking and speeding fines, HECS or Fee Help loans, and money to pay for a car accident if the car was not insured.

There is much more that might be stated about this and Bankruptcy generally so when getting some advice, bear in mind that there are always options when it includes Bankruptcy in Newcastle, so do some research, and good luck!

If you wish to find out more about exactly what to do, where to turn and what inquiries to ask about Bankruptcy, then don’t hold off to get in contact with Bankruptcy Experts Newcastle on 1300 795 575, or visit our website: www.bankruptcyexpertsnewcastle.com.au.