Bankruptcy

If you reside in the Albury area and you are having problem with your Personal or Business Debts?

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Then give Bankruptcy Experts Albury a call. If your debts are out of control, then perhaps the thought of bankruptcy has gone through your mind, and now you have finally taken the next and most difficult step figuring out whether or not bankruptcy is best for you. Just the prospect of it is hard enough without having it become a fact. We understand that there is an overwhelming sense of failure within this process. Maybe you are feeling stuck and like you have no alternatives.

You Can Be 100 % Debt Free!

Can you picture a future devoid of creditors phone calls and enjoying the mail again. There are a handful of things you need to know before you make that very challenging decision. First and foremost, the sooner you act the more options you will have.

5 Questions you must settle in your mind before you file for bankruptcy.

Second, there are 5 significant questions you must have an answer to before you declare bankruptcy, if you would like to know what they are don’t hesitate to download the free-Book on the right hand side of this page it will address these questions thoroughly and give you confidence that you are doing the right thing.

BANKRUPTCY OPTIONS

Is Going bankrupt my only choice?

No! There are several alternatives available to you. Below is a chart outlining the advantages and disadvantages of various debt options, this chart is by no means the entire story but it will allow you to make a well informed decision.

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What is a Personal Insolvency Agreement?

This is flexible agreement between you and your lenders. It is taken care of through a trustee who conducts to just how much you have to pay and when etc. Once those conditions have been met you are then free to begin again with a clean slate.

Why you may prefer 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 controlled
  • Lower legal costs associated with court proceedings

Cons – Personal Insolvency Agreements

  • You are not free until you have paid the entire debt
  • It may take many years to pay the debt
  • It still has an effect on your credit file for 7 years the same as bankruptcy
  • You cannot be a company director until the debt is paid
  • You are required to meet with your creditor face to face
  • Your details will be published in a local paper.

What is a Debt Agreement?

A debt agreement enables a debtor to enter into 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 call us on 1300 795 575

Pros – Debt Agreement

  • Avoid Bankruptcy
  • Stops creditors – can not take any further actions to recover their debts;.
  • You may get to keep important assets.

Cons – Debt Agreement.

  • There is an upfront expense to commence.
  • You need to be approved. If you don’t earn enough you will be rejected.
  • If you don’t make your repayments the agreement may be canceled then the creditors can resume collection 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 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 business say Debt Agreements or Personal Insolvency Agreements are the way to remove my debt?

The reason you find loads of expensive ads on the TV in the Albury area encouraging you to go for one of these options is there is lots of money in it for the firms that manage to them. You will notice if you haven’t already that every establishment has the tendency to give (biased) advice according to the service 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 exceptional situations where a debt consolidation loan is the way to go. Typically however the trouble with them is all it is really doing is bundling 5-15 various debts into one large loan. If you are having a hard time to pay all your different loans now why do you think it will be magically easier to have one enormous bill. Just to make it all even worse you normally have to pay up front for the pleasure of this alternative.

If you want to get some clarification on this simply phone us on 1300 795 575 or go and download “The Big 5” e-Book.

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BANKRUPTCY AND THE FAMILY HOME

If I file for bankruptcy can I keep my home?

In many cases the answer is yes. If this is a major issue for you then the best way to get the solution is to get in touch with us here at Bankruptcy Experts Albury on 1300 795 575 and once we have learnt about your predicament we can give you a crystal clear picture over the phone.

Just about everyone is psychologically connected to their house, its where the children have grown, its where you enjoy life on a day to day basis. People often think its an inescapable consequence of bankruptcy and consequently they push themselves to the brink of madness to not lose the family home.

Will the bank allow me to keep my house even though I’m a bankrupt?

Why you may ask would the bank want bankrupt clients wouldn’t they choose to sell your house and not take the risk? The bank that has kindly lent you the money for your house is making good money every month in interest out of you, day in and day out, provided that you keep up 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 determines that there is enough equity in your home the trustee will force you and the bank to sell your home.

What factors determine if I will lose my house?

If you are up to date with your payments then the biggest 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 ticket 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 you equity as a way to repay your debt, so the trustee will sell your house pay back the debt and give you whatever remains.

How is equity determined?

Typically a registered valuer from the Albury area is the very best 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 call us for how to go about this process so that you can have peace of mind 1300 795 575. Or for a more substantial illustration 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 significant factor is ownership, oftentimes houses are acquired in joint names. In other words a couple may have purchased a house 50/50 using both earnings to make the payments. If one partner declares bankruptcy and the other owner doesn’t, the equity is only calculated 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 choices when if comes to my house?

No not really there are several alternatives accessible 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 deadly. If you have questions don’t hesitate to phone us about your house on 1300 795 575.

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BANKRUPTCY AND EMPLOYMENT

Will my employer be advised?

No

Who will know about my bankruptcy?

There are four groups of people that will know that you are bankrupt. 1. The people you tell. 2. Your creditors or people you owe money to. 3. Individuals 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 file. You only ever do this we 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 Albury we are entirely mindful that there is still a stigma about bankruptcy we recognize this concern actually we can help make certain 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 of days. It enables 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 file for bankruptcy?

The answer to the question is sometimes. The concern with some occupations isn’t that you can’t do the job any longer, it’s more an issue of professional bodies or associations that see bankruptcy in a dim light and can make things troublesome for you.

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What I would certainly suggest is that you do your own homework here, do the homework and go through that process first before declaring bankruptcy because that may help you decide. Check if your career is on the chart below. If it is, I ‘d check with them personally and explain your situation. Some organizations won’t have a problem with your bankruptcy as long as it wasn’t accompanied by shady or dubious behavior.

If you think you employment may be had an effect on by your possible bankruptcy give us a call here at Bankruptcy Experts Albury on 1300 795 575.

BANKRUPTCY AND INCOME

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Will my income be impacted if I go bankrupt?

The answer to the question is maybe. The very first thing you ought to know about going bankrupt is there is no limitation on how much you can earn. However, I will point out that your income is a serious consideration when wading whether you need to declare bankruptcy.

The very first thing you need to know is how much you can earn before you start repaying money to your creditors via your trustee (see summary below).

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Net income is the pre-tax / in the hand amount you earn annually. A dependant is someone who resides with you and earns less than $3,532 each year (no matter their age).

You can obtain a hardship variation that raises the threshold amount, if you have costs such as medical, child care, substantial travel to and from work, or a situation where your spouse used to work but is no longer able to contribute 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 every year and you have no dependants living 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.

How much of my pay can I keep?

Below is set 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 essentially your net income after tax and child support (if applicable) is deducted. If you’re in business whilst bankrupt, then of course it’s also after net (after tax) business expenses.

Your net income could be adjusted to take into account things like salary sacrifice and excessive superannuation payments etc. Your bankruptcy trustee has to determine your real net income according to the bankruptcy rules.

The income threshold numbers 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 $55,446.30 net per per year, i.e. that’s approximately $1,066.23 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 $65,426.63 net per annum, i.e. approximately $1,258.15 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 $70,416.80 net per per year, i.e. approximately $1,354.12 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 $73,189.12 net per per year, i.e. an average of $1,407.43 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 $74,298.04 net per per year, i.e. an average of $1,428.75 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 $75,406.97 net per annum, i.e. around $1,450.08 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 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 have to go bankrupt?

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. An easy way to understand it is the same income rules apply for each individual in the home.

Who is considered a dependent?

In the case of bankruptcy a dependent is anyone you support who earns less that $3,532 per year.

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BANKRUPTCY AND SELF EMPLOYMENT

Will I lose my small business if I go bankrupt?

The short answer is you don’t have to but you do will want to get the right assistance. Corporate insolvency laws are very involved and you will need to tread carefully if you would like 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, even so that doesn’t inevitably mean you can’t run your very own business and employ staff etc.

What if my business has serious debts?

As a part of your bankruptcy we can help you remove your business debts so you can get a new beginning.

Should I put my company into liquidation?

Just 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 automatically mean you have to declare bankruptcy. In Australia, businesses that become insolvent have a few choices, such as liquidation, voluntary administration and so on. If you wish 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. Don’t forget, it’s the individuals who go bankrupt, not businesses.

This is a perplexing area, so get some qualified advice on this if you have a business. Ordinarily speaking, the debts in a business and personal debts go hand in hand 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 influences their ability 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 could be. There are factors to consider when and if you go bankrupt as a business owner: you can not rack 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 worried about what you can and can’t do as a company owner; just get the correct advice and call Bankruptcy Experts Albury now 1300 795 575.