Bankruptcy is considered as a legal issue you can declare it when it is not possible for you to pay your debts on the due date. After declaring it your financial control goes into the hands of a trustee.
It is done for the sake of remaining protected from any kind of legal action, which can be taken by a person to whom you owe money. However, before declaring oneself as bankrupt, you need to think and analyze the situation.
It is the last option and you may have to face serious consequences. You can deal with your unmanageable debts if you have suitable bankruptcy advice. The Insolvency experts in Australia can guide you on how you can deal with this situation. With their assistance, you can manage the financial stress and have adequate information regarding bankruptcy.
Gain an Insight About Bankruptcy
Bankruptcy is an easy option to deal with your creditors quickly. However, before you implement it think about the consequences which you have to face. In situations like when it is a difficult task to pay your debts, it is not possible to make proper arrangements with your creditors.
In this situation, you can declare the financial ruin. A debtor’s petition can be filed to declare that you are in debt.
A creditor cannot declare you bankrupt unless you have to pay an amount of $5,000 or more than this. Once you are declared as financially ruined, you need to pay the following debts like penalties, fines which are imposed by the court, your utility bills and other debts that you have once the bankruptcy status.
When You Become Bankrupt What Assets Can You Keep?
Some of the assets you can retain with you as these are protected. Other assets may be taken by the trustees and sold out.
After bankruptcy, you may keep household items, tools used to make an income, vehicles like cars up to a certain limit, life insurance policies, and funds to manage a personal injury. It is advisable to investigate thoroughly which assets are under protection and which are not.
Your trustees can recover these assets. These include your houses, land, apartments, business, etc. shares, tax refund for the income earned by you, and lottery winnings. Assets that are owned with some other person may be put for selling by your trustee.
What If You Are Already Insolvent Before Bankruptcy?
If you can’t pay your debts, then you should not opt for further credit. If you do this after becoming bankrupt then it is considered a crime under the bankruptcy Act. You have to face serious consequences.
Use of Credit Card After Bankruptcy
It matters to financing companies whether they wish to allow the use of credit cards. It is a serious offense to avail this facility after exceeding a certain limit. In case, if you have not disclosed to the person with whom you are dealing with your bankruptcy.
Bankruptcy is a serious issue. You need to have enough details regarding this before you declare oneself as a bankrupt. It is the last option that declares you have become financially ruined.