Declearing Bankruptcy – FAQ

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Declearing Bankruptcy – FAQ 2017-11-23T03:04:39+00:00

Can I travel offshore?

Yes. All you need to do is apply to your bankruptcy trustee for consent to go. You’ll get it, but there is a one-page form you will need to fill in simply to inform the trustee of how long you will be taking a trip, etc. This law is really only there so high flyers don’t skip the country. In some cases the trustee will call for your passport, but don’t fret about it because you can request it back when you need to take a trip. Call us if you wish to know more about travel on 1300 795 575.

Can I keep my property?

Oftentimes the answer is yes! In fact, in many cases nowadays we can help you keep your home. At Bankruptcy Experts we are professionals at assisting people keep their homes. It’s possibly very complicated, so if you are concerned about losing your house call us on 1300 795 575 and we will walk you through your options.

The thought of losing the family house is probably the most significant hindrance to people declaring bankruptcy. We talk to people day after day who have fought for years under significant financial stress so they don’t lose their home.

So how is it possible to be bankrupt and keep your house? Simple, really; it’s a matter of equity. Let’s put it this way, if you have a home that’s worth $350,000 and you owe the bank $350,000 you in reality have no equity in the house, right? The trustee will only sell off your home if there is sufficient equity in the home if sold to repay some of your debts. So in this particular instance, the trustee will then give you some alternatives, one of which is to simply to continue paying the mortgage and stay in the house while you are bankrupt.

So how can I learn the value of my house? A basic way is to go onto realestate.com. au and check out the sold houses tab in the Wyong area and it will show you all the recent sales in your location. Another option, if you are confident or are very worried, is to have a registered valuer do a valuation on your home, not a real estate agent (unless they are registered valuers, of course). Be advised this will cost you somewhere between $300-700. Just another aspect of house values. If the trustee wants to sell your house they do so reasonably quickly. It’s not a 6-month sleek marketing campaign and instead it’s commonly by auction and they just meet the market on the day and that’s it. So when considering the value remember it’s a sell now price, not when the market improves.

Once you have worked out the market value of your house the next thing to review is ownership.

Generally most home loans are between 2 people as joint tenants who both contribute to the mortgage. If only one party is going bankrupt then the equity is calculated this way.

Say the house is worth $400,000 and the current market value is $350,000. Then the balance of equity in the home is $50,000, right? Half of that total equity is automatically assigned to the party not going bankrupt, leaving $25,000 for the bankrupt. Out of that $25,000 the bankrupt party has to pay for all of the selling costs including advertising etc., which, depending on where you live, can cost anywhere between $12,000-20,000. In this particular case say the selling expenses are going to be $15,000 then the remaining left over after the sale is $10,000. So in this case the trustee will give the non-bankrupt party a number of options. One of which is typical is for the bank to say, “Pay us the $10,000 and we won’t sell the home and you will have it removed as an asset from the bankrupt’s estate.” Or, in other words, work out a deal to pay the $10,000 and you can keep your home.

Just a side note: the credit union who has given you the mortgage will require the payments to be kept up naturally. No matter what the trustee decides, if you don’t pay the bank the mortgage they will ultimately ask you to leave. So, put simply, keeping your house obviously implies keeping the mortgage as well.

There are many more options with your home, and we have just detailed one option of potentially 20 solutions you can decide on, when it comes to your house. We understand you need to get this correct. Gambling with the family home can possibly be an overwhelming business. If you intend to get the right advice or you just want to talk to someone call us on 1300 795 575.

When would my travel be restricted?

Your travel would be limited by the trustee as a result of adverse legal action. For example, if your bankruptcy is a part of a criminal investigation or fraudulent activities, it’s possible the trustee will restrict your travel.

What happens to my credit ranking?

Bankruptcy lasts 3 years and will sit on your credit report for that time. However, just like any default it will be visible on your credit report for 7 years. You can have it eliminated if you get your bankruptcy annulled.

Will I ever have the chance to borrow money again once I’m bankrupt?

Bankruptcy lasts 3 years, and in that time you will not get a loan. After the 3 years is ended you will have the capacity to get loans; you just won’t get the most ideal rate. Your credit file will be wiped clean 4 years after you have been discharged as a bankrupt then you will have an ideal credit report again and you will get the best deal on loans.

Will I lose my car if I go bankrupt?

Generally no. Bankrupts seldom lose their cars because they’ve gone bankrupt. Obviously, this is conditional and we can let you know if yours is safe. Call Bankruptcy Experts Wyong on 1300 795 575.

There is a threshold or amount of wholesale value your car may be worth while you are bankrupt, which is $7,350. You will find all sorts of erroneous information about this online, but here are the facts. That $7,350 represents not the total value; it represents equity. So, simply put, if you have a car worth $35,000 you are repaying or leasing and the amount you could sell it for is $30,000 then you can keep your car because its equity is only $5,000. The company that lent you the loan for the car will be satisfied for you to keep the car although you are bankrupt provided that you continue the payments.

What if I’m overdue on my car monthly payments and I go bankrupt; will they reposess my car?

Get some advice on this one. If you need some advice at this moment just call 1300 795 575. Basically, you will get about 2 to 3 payments grace when it comes to car loans. The bottom line is simple: whether you are bankrupt or not, if you miss 3 or more monthly payments on your car loan they will repossess the car. Don’t assume because you are going bankrupt you are automatically going to lose your car because in many cases we help people keep them.

When are the creditors advised of my bankruptcy?

The creditors, or the people you owe money to, are informed in writing at about the same time you receive your bankruptcy file notification.

Will anyone come to my house?

No. The bankruptcy process is generally a paperwork exercise. All that actually takes place is you will either be written to or emailed a letter notifying you that you are bankrupt. At Bankruptcy Experts Wyong we ensure that this entire procedure is that straightforward, so if you have questions about this contact 1300 795 575.

Can I have my bankruptcy annulled?

Yes. This process will take about 2 weeks and will entirely eliminate the bankruptcy from your credit history. There are provisions within the Bankruptcy Act that permit a bankrupt individual to have their bankruptcy annulled through a Section 73 proposal.

The repercussions of creditor’s claims can often result in bankruptcy, regardless of regardless if it was the individual’s choice to enter bankruptcy, or if it was filed by a creditor. However, bankruptcy is far from the end of the world for the individual who undergoes bankruptcy.

We have been guiding people in the Wyong area for several years so call us today on 1300 795 575 to get some advice on this matter. We explore the best possible procedure for you to get back up and running, removing residual effects and obstacles of past financial situations to give you the best possible result. Having experience and skills specialising in Section 73 proposals, we can combine this with our proven strategies and tactics to bring you through bankruptcy unharmed, ready to start over.

Can I get my bankruptcy annulled?

Firstly, having your bankruptcy annulled is practically reversing it 100 %. So if you are contemplating you would like to have your bankruptcy annulled there are a few things you have to know.

Firstly, how does the annulment work? An easy way to understand it is let’s say someone owes you $50,000 and they haven’t paid you one dollar back for years. Then to make things worse you discover that they have gone bankrupt. You would kiss that money goodbye, right? Years pass and they approach you with an offer to pay you $5,000 that their grandparents is giving to them to settle your debt with them. Undoubtedly you are pleased to take it, because it is better than a kick in the teeth. The only condition they ask for in return is that you agree to have the bankruptcy removed from their record, and if you don’t agree to do that then there will be no $5,000. Obviously you don’t care about their credit file; you are just over the moon they are offering you some money after all these years.

In bankruptcy terms this process is usually described as a Section 73 proposal, and it’s an approach where “everybody wins.”.

Ultimately the trustee meets your creditors, proposes your offer, which is substantially less than the original debt owed, on the condition they wipe your credit file clean.

This procedure takes a few weeks. The proposal can be done at any moment in the 3 years you are bankrupt. However, you ought to consider the timing of your proposal. Because it does cost money to do this, you want to ensure the odds are on your side. For example, if you are repaying money to the trustee each week because you earn over the threshold amount, then your creditors will know they are going to receive a certain amount from you over the 3 years in any case so it better be more than that will add up to.

If you have only been bankrupt 3 weeks it will be more challenging to get an annulment because they might get some funds from you over the 3 years if you earn over the threshold sum of money.

If you want a helping hand to put a section 73 proposal to your trustee or just want more details about the timing of when to put a proposal forward, simply phone us on 1300 795 575.

Can I go bankrupt if I’m currently in a Debt Agreement or Personal Insolvency Agreement or in a Consolidation Loan Contract?

Yes! We can guide you finalise all of these agreements. With Debt Agreements and Personal Insolvency Agreements we have to have you discharged from them first before you file for bankruptcy, but it’s not a problem. If you are locked into one of these and just can’t climb on top give us ring at 1300 795 575.

What debts won’t bankruptcy remove?

There are very few debts that bankruptcy won’t 100 % erase, like Centrelink, child support, HECS and a court-imposed fine (speeding fines, etc.) and, finally, money owed to an insurance company because of a car accident in an uninsured car that you were driving.

Besides that, it will cancel things like your credit cards, store cards, GST and tax, unsecured personal loans, etc. In reality, there are a lot of things to list so if you have a particular debt you are worried about just ask for a free consultation 1300 795 575.

Is there a limit to the amount of debt I can go bankrupt for?

You can’t go bankrupt for an amount less than $5,000; however, there is no limit beyond that. If you owe a couple million dollars, that’s treated no differently than $20,000.

What is the difference between a secured and unsecured debt?

An unsecured creditor is a creditor who does not have a hold over the chattels/assets/property acquired with the credit afforded to you. Such liabilities include credit card debts.

A secured creditor has a hold over the chattels/assets/property until the debt is paid in full. If a debtor defaults on a secured obligation, the creditor has the right to repossess and sell the chattels/assets/property to decrease the debt.

How can I be sure that you will succeed in making me bankrupt?

We have helped thousands of people declare bankruptcy for many years and we have never had anyone’s application rejected. That’s why we offer a 100 % money back guarantee.

What if I’m not completely sure who I owe money to?

There is a simple method we use here, and all you need to do is get a copy of your credit report as it will have your credit history on there. Companies like www.veda.com.au will have the ability to get you a copy for a modest fee.

I’ve had a car accident. Will the debt be covered in bankruptcy?

Car accidents might be difficult, so to keep it simple call us on 1300 795 575 to get the right advice on your situation. However, as a general rule, if you were driving a motor vehicle that was not insured then the cost of the repairs is not erased with bankruptcy. Having said that, it depends who admitted liability or who was at fault. If you go to court and the court confirms you were not at fault then you should be all right.

Can I have business debts wiped out with my bankruptcy also?

Yes! We can help you carry this out, although it’s possible there are effects and lots of regulations around this procedure, so call us and we will assist you through the procedure on 1300 795 575. Bankruptcy Experts Wyong are specialists at assisting businesses get back on their feet.

Can I pay out my bankruptcy debt and have it annulled?

Yes. There is an approach to follow, but if you win lotto or inherit some cash you can use it to get your slate wiped clean. There is a way of doing this properly; just call us first.

Suppose someone is bankrupting me; is there anything I can possibly do?

Generally, if you owe money to someone they can get a court order and bankrupt you. They have to follow a process, but it is feasible. What you need to avoid at all costs if possible is another person bankrupting you, as it’s always best to voluntarily declare bankruptcy. Unless you enjoy attending court and harassing phone calls, of course.

What if my company has received a Demand or Wind-Up notice; can I still go bankrupt?

Yes. However, this is a challenging process and we suggest you get some qualified advice; if its handled incorrectly, it could be disastrous. For a free consultation call Bankruptcy Experts Wyong 1300 795 575.

Do I need to contact my creditors?

No, we do that for you. Actually, we serve as an intermediary or a midway point between you and your creditors. So basically you are not obligated to advise them of your bankruptcy; we do that for you.

How long does bankruptcy last?

3 Years.

How long does it take to declare bankruptcy?

Usually, it takes about 2 weeks.

What if someone else signed for a loan (joint loan or guarantor) and I go bankrupt; will they still be liable for the debt?

Yes. Normally a lender will pursue the other person who signed the loan papers with you for the sum total of the outstanding money owing on the loan.

What happens to a debt I forgot about at the time of becoming bankrupt?

Don’t panic! If you forgot about a debt and remembered it later, just speak with your trustee with the name of the creditor, address, date the debt was incurred, sum of debt and any account or reference number/s provided by the lender. Your trustee will add the creditor to your bankruptcy paperwork and send a notification to the creditor.

Do I have to go to court if I go bankrupt?

No. We deal with the entire procedure for you.

What if I have gambled some of my funds and I go bankrupt; will I get in trouble?

Typically this is not a problem, so if you are a gambler, don’t worry. What the trustee doesn’t like is inconsistency here. Put simply, you have never taken a chance in your life and all of a sudden you lost $50,000 on the ponies, then you might have some explaining to do, of course, because it just doesn’t add up.

Can my bankruptcy be completed the phone?

Yes. We understand you are busy. If you have a phone we can help you; simply call us on 1300 795 575.

What if I’m living in another country; can I still file for bankruptcy?

Yes. This is feasible. It requires some emails back and forth but it can be done.

Can I include my overseas debts in my bankruptcy?

Yes. If a person originally residing in another country is now residing in Australia then files for bankruptcy and they have a debt incurred in that foreign country, you just list that debt on the paperwork.

In most cases the creditor overseas will erase the debt. It is possible and legal for them, however, to reject your application, and if you return to that country you may be subject to their bankruptcy laws.

How will the trustee know what assets I have?

There are a few ways the trustee can learn, and the best and simplest way is for you to tell them when we do the paperwork. There is also a government website which has major assets listed also. You ought to get some advice about assets; be careful.

Can I keep an inheritance if I declare bankruptcy?

This is complicated and you will want the right assistance, so if you need more information about inheritances call us on 1300 795 575.

Will I lose my Pension or Workers Compensation payments if I go bankrupt?

No. The income thresholds are the same for everyone so no matter how you earn your income you have to earn about $50,000 each year before your income will be impacted by bankruptcy.

Will I have the ability to keep my income tax return once I’m bankrupt?

Yes, if you owe the Australian Tax Office money. Put simply, if none of your debts is tax debt, then no, the ATO will keep the money you owe them.

No, if you do not owe the ATO money. Your income tax return is deemed net income, so if you are beneath the threshold amount you can earn while bankrupt then you will get your entire tax return back.

What about child support ?

If you need to pay child support, this money will be deducted from your net income, so what you have the ability to keep after you pay your tax and then child support is considered net income. That is why in the world of bankruptcy net income numbers are always quoted.

Can I buy shares and make investments while I’m bankrupt?

Yes, you are allowed even while you are bankrupt, but the trustee will take them off you, as they are considered an asset.

What assets can I keep if I go bankrupt?

You can keep just about everything except big things like houses, cars, shares and inheritances. Even things like houses and cars may be able to be spared. Just call us before you make any bold decisions on 1300 795 575 for Bankruptcy Experts Wyong.