Considering bankruptcy? What are your options?
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In the midst of the current economic crisis, many families are finding it difficult to meet their monthly obligations. If you, like so many others, are finding it impossible to meet your expenses, the stress may have you at your wits’ end. If your bills are piling up, and your paycheck is not enough to meet your basic needs, it may be time to consider declaring personal insolvency as your option for becoming debt-free.
NOTE: Personal insolvency is not recommended, however it is an option for those in severe financial difficulties. Try all other options to solve your debt problems before you decide to go bankrupt.
* What is Bankruptcy?
It is a procedure by which an individual declares legal insolvency (inability to pay one’s debts). By declaring insolvency, creditors can no longer contact you in order to demand repayment of your debt.
You may, however, be required to liquidate certain assets (such as personal property) in order to pay off a portion of your debt. Typically, it lasts for a period of 3 years; however, under certain circumstances, it may be extended for 5 to 8 years.
* How it can help you
You will no longer be obligated to make payments to your creditors. While you will face certain restrictions (you may be prevented from traveling overseas while bankrupt, for example, and you will be unable in many cases to incur further debt), you will have the opportunity to rebuild your finances and get your life in order.
* The Advantages
You will be able to eliminate your debt. You will no longer owe money on your unsecured loans and taxes; by filing for bankruptcy, you will not be pestered by calls from creditors. You will be able to earn money and save for your future.
* The Disadvantages
After you have declared personal insolvency, you will face certain restrictions, including the following:
- You will be unable to leave Australia without the consent of the trustee ;
- It will show up on your credit listing for at least 7 years;
- If your income exceeds a predetermined amount, you will need to make payments to your creditors;
- If you violate the terms of your personal insolvency, you may be subject to a prison term.
When you file for personal insolvency, you will be required to fulfill certain requirements. However, you will be in a position to regain control of your financial situation, eliminate the stress of being unable to pay your monthly bills, and plan for your future.
Remember, there are alternative solutions to bankruptcy contact us for more information.