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Declaring Bankruptcy – FAQ

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Declaring Bankruptcy – FAQ 2017-10-05T01:25:15+00:00

Can I travel to another country?

Yes. All you will want to do is apply to your bankruptcy trustee for permission 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 traveling, etc. This requirement is really only there so high flyers don’t skip the country. In some cases the trustee will ask for your passport, but don’t stress about it because you can request it back when you have to take a trip. Call us if you want to know more about travel on 1300 795 575.

Can I keep my the family home?

In many cases the answer is yes! In point of fact, in many cases these days we can help you keep your home. At Bankruptcy Experts we are professionals at helping people keep their houses. It’s potentially very complicated, so if you are concerned about losing your home call us on 1300 795 575 and we will walk you through your choices.

The notion of losing the family house is probably the greatest hindrance to people filing for bankruptcy. We talk to people each day who have fought for many years under tremendous financial strain so they don’t lose their home.

So how is it possible to be bankrupt and keep your home? Simple, really; it’s a matter of equity. Let’s put it like this, if you own a house 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 your home if there is sufficient equity in the home if sold to repay some of your debts. So in this particular situation, the trustee will then offer you some choices, one of which is to simply to continue paying the mortgage and stay in the house while you are bankrupt.

So how can I determine the market value of my house? A simple way is to go onto au and look at the sold houses tab in the Emerald area and it will show you all the recent sales in your location. Another possibility, if you are not sure 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 one more aspect of house prices. If the trustee has to sell your house they do this reasonably quickly. It’s not a 6-month slick marketing campaign and instead it’s typically by auction and they just meet the market on the day and that’s it. So when thinking about the value remember it’s a sell now price, not when the market picks up.

Once you have identified the market value of your house the next thing to consider is ownership.

Generally most home loans are between 2 people as joint tenants who both contribute to the mortgage. If only one party is filing for bankruptcy then the equity is calculated in this manner.

Say the house is worth $400,000 and the current market value is $350,000. Then the remaining equity in the home is $50,000, right? Half of that total equity is automatically earmarked to the party not going bankrupt, leaving $25,000 for the bankrupt. Out of that $25,000 the bankrupt party needs to pay for all of the selling costs including marketing etc., which, depending upon where you live, can cost anywhere between $12,000-20,000. In this particular case say the selling fees 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 numerous options. One of which is popular 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, simply put, cut 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 loan will want the payments to be kept up obviously. No matter what the trustee decides, if you don’t pay the financial institution the property loan they will ultimately ask you to move out. So, put simply, keeping your home naturally implies keeping the home loan also.

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

When would my travel be hampered?

Your travel would be limited by the trustee as a result of 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 score?

Bankruptcy lasts 3 years and will sit on your credit report for that time. However, as with any default it will turn up on your credit file for 7 years. You can have it taken off if you get your bankruptcy annulled.

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

Bankruptcy is for 3 years, and in that time you will not get a loan. After the 3 years is up you will have the ability to get loans; you just won’t get the greatest rate. Your credit report will be wiped clean 4 years after you have been discharged as a bankrupt then you will have an excellent credit record again and you will get the most competitive deal on loans.

Will I lose my car if I go bankrupt?

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

There is a threshold or amount of wholesale value your car can possibly be worth while you are bankrupt, which is $7,350. You will find all sorts of unreliable information about this on the internet, 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 pleased for you to keep the car although you are bankrupt as long as you maintain the payments.

What if I’m overdue on my car repayments and I go bankrupt; will they take my car?

Get some advice on this one. If you need some advice immediately 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 otherwise, if you miss 3 or more payments on your car loan they will repossess the car. Don’t presume because you are going bankrupt you are automatically going to lose your car because in most cases we help people retain them.

When are the creditors notified of my bankruptcy?

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

Will anyone visit my house?

No. The bankruptcy procedure is essentially a paperwork exercise. All that actually takes place is you will either be written to or emailed a letter informing you that you are bankrupt. At Bankruptcy Experts Emerald we make sure that this entire procedure is that simple, 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 remove the bankruptcy from your credit file. There are provisions within the Bankruptcy Act that allow a bankrupt individual to have their bankruptcy annulled through a Section 73 proposal.

The repercussions of creditor’s claims can often result in bankruptcy, irrespective 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 person who undergoes bankruptcy.

We have been assisting people in the Emerald area for years so call us today on 1300 795 575 to get some insight on this matter. We exercise the best possible course of action for you to get back up and running, eradicating residual effects and hindrances of past financial situations to give you the best possible outcome. Having experience and skills specialising in Section 73 proposals, we can combine this with our proven solutions and methods to bring you through bankruptcy unscathed, ready to start over.

Can I get my bankruptcy annulled?

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

Firstly, how does the annulment actually work? A simple way to think of it it is let’s say someone owes you $50,000 and they haven’t paid you one cent back for many years. Then to make matters worse you find out that they have filed for bankruptcy. You would kiss that money goodbye, right? Many years pass and they approach you with an offer to repay you $5,000 that their aunty is giving to them to settle your debt with them. Naturally you are happy to accept it, because it is better than a kick in the teeth. The only condition they request in return is that you agree to have the bankruptcy removed from their credit history, 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 cash after all these years.

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

Ultimately the trustee meets your creditors, presents your offer, which is dramatically less than the original amount owed, on the condition they clear your credit history clean.

This approach takes a few weeks. The proposal could be done at any moment in the 3 years you are bankrupt. However, you ought to bear in mind the timing of your proposal. Because it does cost money to do this, you need to make certain the odds are on your side. For example, if you are paying back money to the trustee each week because you earn over the threshold amount, then your creditors will know they are going to get 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 tougher to get an annulment because they might get some income from you over the 3 years if you earn over the threshold sum of money.

If you want assistance to put a section 73 proposal to your trustee or just want more information 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 help you cancel all of these arrangements. With Debt Agreements and Personal Insolvency Agreements we need to have you released from them first before you declare bankruptcy, but it’s not a problem. If you are locked into one of these and just can’t get on top give us ring at 1300 795 575.

What debts won’t bankruptcy wipe out?

There are very few debts that bankruptcy won’t 100 % eliminate, 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.

Aside from that, it will cancel things like your credit cards, store cards, GST and tax, unsecured personal loans, etc. In truth, there are way too many things to list so if you have a particular debt you are concerneded about just call 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 managed 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 debts include credit card debts.

A secured creditor has a hold over the chattels/assets/property until the debt is paid completely. If a debtor defaults on a secured loan, the creditor has the right to repossess and sell the chattels/assets/property to pay back the debt.

How can I make certain that you will succeed in making me bankrupt?

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

Suppose I’m not completely sure who I owe money to?</h2

There is a simple method we use here, and all you need to do is get a copy of your credit file as it will have your entire credit history on there. Companies like will be able to get you a copy for a small fee.

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

Vehicle accidents can possibly be tricky, 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 car that was not insured then the expense of the repairs is not eliminated 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 okay.

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

Yes! We can help you do this, although it’s possible there are implications and lots of regulations around this procedure, so phone us and we will guide you through the procedure on 1300 795 575. Bankruptcy Experts Emerald are experts at assisting businesses get back on their feet.

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

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

What if someone is bankrupting me; is there anything I can do?

Generally, if you owe money to someone they can obtain a court order and bankrupt you. They need to follow a procedure, 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 file for bankruptcy. Unless you enjoy attending court and annoying 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 complex process and we suggest you get some expert advice; if its handled incorrectly, it could be fatal. For a free consultation contact Bankruptcy Experts Emerald 1300 795 575.

Do I need to contact my creditors?

No, we do that for you. In fact, we act as an intermediary or a midway point between you and your creditors. So essentially you are not obligated to update them of your bankruptcy; we take care of that for you.

How long does bankruptcy last?

3 Years.

How long does it take to file for 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. Typically a lender will pursue the other person who signed the loan documents with you for the total of the outstanding debt owing on the loan.

What happens to a debt I failed to remember at the time of becoming bankrupt?

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

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

No. We handle the entire procedure for you.

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

Ordinarily 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 gambled 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 carried out the phone?

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

What if I’m living overseas; can I still go bankrupt?

Yes. This is feasible. It requires some emails to and fro but it can be carried out.

Can I include my international debts in my bankruptcy?

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

In many 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 most effective and quickest way is for you to inform them when we do the paperwork. There is also a government register which has major assets listed also. You have to get some advice about assets; be careful.

Can I keep an inheritance if I file for bankruptcy?

This is complicated and you will require 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 file for bankruptcy?

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

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

Yes, if you owe the Australian Tax Office money. Put simply, if one of your debts is tax debt, then no, the Australian Tax Office will keep the money you owe them.

No, if you do not owe the tax office money. Your tax return is deemed take-home pay, so if you are beneath the threshold amount you can earn while bankrupt then you will get your whole tax return back.

What about my child support obligations ?

If you need to pay child support, this money will be deducted from your net income, so what you get 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 get them off you, as they are deemed an asset.

What assets can I keep if I go bankrupt?

You can keep almost everything except big things like houses, cars, shares and inheritances. Even things like houses and cars may be able to be kept. Just phone us before you make any big decisions on 1300 795 575 for Bankruptcy Experts Emerald.

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