Bankruptcy

Debts too Large or No income?

For those clients where the debts are simply too large and they have no available income to meet the obligations of a Debt Agreement or any other type of arrangement, bankruptcy is a viable option worthy of consideration and not simply a place of last resort. If we believe this is the most appropriate course of action considering your circumstances, we will suggest this to you. With us providing you with an understanding of the Bankruptcy process and the implications for you personally, you will feel more at ease with this difficult decision.

Some basic details that are not commonly known and misunderstood about bankruptcy are listed below, this is not a comprehensive list and further information relative to your situation can be provided by contacting us. Also, visiting the ITSA (Insolvency and Trustee Service of Australia) website at www.itsa.gov.au can provide further information.

Bankruptcy Requirements

Minimum amount considered for bankruptcy is $2,000
Maximum value of a motor vehicle for a bankrupt individual is $6,700
Maximum value of tools of trade for a bankrupt individual is $3,350
You may still need to make repayments to your trustee under the terms of the bankruptcy if your income exceeds $42,242.20 net per annum (single person, with no dependents)
Your bankruptcy will not affect a creditors right to pursue any other person involved in debts that are held in joint names or the guarantor of any debts you may have
The Australian Taxation Office may retain and offset any tax refund due to you to repay any debts you owe to the Commonwealth Government (ie ATO, Child Support Agency, Centrelink etc)

You may still have to pay the following debts even if you declare bankruptcy:

HECS
Maintenance Debts (Child Support)
Debts incurred through Fraud

Some secured creditors may take your assets and sell them if you fall behind in payments on your home mortgage, motor vehicle or other goods. You may be able to make arrangements to retain these assets, as long as repayments are kept up to date – it is essential that you speak with creditors PRIOR to declaring bankruptcy.

Overseas travel is restricted and only allowed with written permission from the trustee before you leave. There needs to be legitimate reason for your travel. Failure to abide by this condition could see the term of your bankruptcy extended to 5 years.

Want to know more...

If so, contact us for a private and confidential discussion with one of our experienced and understanding franchisees.