If you live in the Mount Isa region and you are struggling with your Personal or Business Debts?
Then give Bankruptcy Experts Mount Isa a call. If your debts completely out of control, then perhaps the notion of bankruptcy has gone through your mind, and now you have finally taken the next and most challenging step discovering whether or not bankruptcy is right for you. Just the notion of it is devastating enough without having it become a reality. We understand that there is an overwhelming sense of failure within this process. Maybe you are feeling entraped and like you have no alternatives.
You Can Be 100 % Debt Free!
Can you conceive of a future free from creditors phone calls and looking forward to the mail again. There are a handful of things you must know before you make that very challenging decision. First and foremost, the sooner you act the more alternatives you will have.
5 Questions you must settle in your mind before you file for bankruptcy.
Secondly, there are 5 essential questions you must have an answer to before you declare bankruptcy, if you would like to know what they are feel free to download the free e-book on the right hand side of this page it will address these questions specifically and give you confidence that you are doing the right thing.
Is Bankruptcy my only choice?
No! There are several choices available to you. Below is a graph outlining the benefits and drawbacks of various debt options, this chart is by no means the entire story but it will allow you to make a well informed decision.
What is a Personal Insolvency Agreement?
This is adaptable agreement between you and your creditor. It is administered through a trustee who conducts to just how much you have to pay and when etc. Once those conditions have been met you are then free to begin again with a clean slate.
Why you may prefer to consider a Personal Insolvency Agreement
Pros – Personal Insolvency Agreements
- Avoid bankruptcy
- Possibly limit liability to make income contributions
- You pay back 30 to 70 cents in the dollar to your creditors
- It could be a very a quick process.
- May have the ability to keep important assets.
- The debtors assets are independently handled
- Lower legal costs connected with court proceedings
Cons – Personal Insolvency Agreements
- You are not free until you have paid the entire debt
- It may take several years to pay the debt
- It still affects your credit score for 7 years the same as bankruptcy
- You can’t be a company director until the debt is paid off
- You are required to meet in person your creditor face to face
- Your details will be published in a local paper.
What is a Debt Agreement?
A debt agreement permits a debtor to participate in an arrangement with their creditors to satisfy their debts without being made bankrupt.
Can I Enter into a Debt Agreement?
You can’t enter into a Debt Agreement if you have been bankrupt, or you are currently already in a debt agreement. There are also income restrictions, property value and unsecured debt value restrictions, If you wish to know more please contact us on 1300 795 575
Pros – Debt Agreement
- Avoid Bankruptcy
- Stops creditors – can not take any further actions to recoop their debts;.
- You may get to keep important assets.
Cons – Debt Agreement.
- There is an upfront cost to begin.
- You have to be approved. If you don’t earn enough you will be rejected.
- If you don’t make your repayments the agreement will be canceled and then the creditors can resume collection of their debts;.
- The debtor details will show up on the National Personal Insolvency.
- Index (NPII) from the date that the debt agreement proposal was approved by ITSA.
- It also affects your credit rating for 7 years the same as bankruptcy.
- Nothing changes with secured creditors rights they may repossess if the debtor is in default.
Why do some companies say Debt Agreements or Personal Insolvency Agreements are the way to go?
The reason you find a barrage of expensive ads on the television in the Mount Isa region inviting you to sign up for one of these alternatives is there is plenty of cash in it for the business that administer to them. You will notice if you haven’t already that every company has the tendency to give (biased) advice depending on the service that they provide. For example Debt Agreement Companies ridicule bankruptcy companies and so it goes with much of the financial services industry.
Should I take into consideration a Debt Consolidation Loan?
There is the occasional circumstances where a debt consolidation loan is the best idea. Normally however the trouble with them is all it is actually doing is bundling 5-15 different debts into one large debt. If you are battling to pay all your various loans now why do you think it will be magically easier to have one enormous debt. Just to make it all even worse you typically have to pay up front for the pleasure of this choice.
If you would like to get some advice on this simply phone us on 1300 795 575 or go and download “The Big 5” e-Book.
BANKRUPTCY AND THE FAMILY HOME
If I go bankrupt can I keep my home?
Generally the answer is yes. If this is a major worry for you then the best way to get the answer is to phone us here at Bankruptcy Experts Mount Isa on 1300 795 575 and once we have learnt about your situation we can give you a crystal clear picture over the phone.
Almost everyone is psychologically connected to their house, its where the kids have grown up, its where you enjoy life on a day to day basis. People generally think its an unavoidable consequence of bankruptcy and consequently they push themselves to the brink of insanity to not lose the family home.
Will the bank allow me to keep my house despite the fact that I’m a bankrupt?
Why you might ask would the bank want bankrupt customers wouldn’t they wish to sell your house and not take the chance? The bank that has generously lent you the money for your house is making good money every month in interest from you, month in month out, provided that you maintain to date with your repayments then the bank wants you in there at all costs. Ultimately however it’s not the bank’s call if the trustee determines that there is enough equity in your house the trustee will require you and the bank to sell your home.
What factors determine if I will lose my house?
If you are up to date with your repayments then the most significant issue is equity. The trustee has a responsibility to gather up as much money to help pay your bills once you file for bankruptcy. Equity is the secret here. If you have $300,000 equity in your home and you have $100,000 worth of debts and no other way to pay the debt then the trustee sees your equity as a way to repay your debt, so the trustee will sell your house repay the debt and give you whatever remains.
How is equity determined?
Generally a registered valuer from the Mount Isa area is the most effective and safest way to figure out your current equity position, before you race out and get the local real estate agent to give you a Mickey Mouse evaluation phone us for how to go about this process so that you can have assurance 1300 795 575. Or for a greater explanation about how your house will be considered do not hesitate to download “The Big 5” e-book.
Suppose my partners name is on the home loan?
Another huge factor is possession, oftentimes houses are bought in joint names. In other words a couple may have acquired a house 50/50 using both incomes to make the monthly payments. If one party files for bankruptcy and the other owner doesn’t, the equity is only calculated on the 50 % of the property.
So basically if you have a house in joint names and your total equity position is $100,000 then your actual equity is half of that $50,000.
It sounds like I have very few options when if comes to my house?
No not really there are several alternatives available to you when it comes to your house or some other asset when declaring bankruptcy. You will need to get the right assistance about this however, getting it wrong could be fatal. If you have questions feel free to phone us about your house on 1300 795 575.
BANKRUPTCY AND EMPLOYMENT
Will my employer be notified?
Who will know about my bankruptcy?
There are four groups of people that will learn that you are bankrupt. 1. The people you tell. 2. Your creditors or people you owe money to. 3. The people that see your credit file while your bankrupt. The only way that will happen is if you sign a privacy form for them to access your credit report. You only ever do this when you apply for a loan. 4. You will be listed on the National Insolvency Index it online somewhere, its hard to find and you need to pay to see if someone is bankrupt on it.
At Bankruptcy Experts Mount Isa we are completely conscious that there is still a stigma about bankruptcy we are aware of this concern as a matter of fact we can help ensure that if you declare yourself bankrupt you will not need to go to court or get your name in the newspapers or be publicly made out to be a criminal. We can help ensure bankruptcy is simple and quick. In fact the whole process will only take a handful of days. It enables ordinary people to get out of debt and on with their lives. For more detailed information about your job download “The Big 5” e-Book.
Will I lose my job if I go bankrupt?
The answer to the question is occasionally. The complication with some professions isn’t that you can’t do the job any longer, it’s more an issue of professional bodies or associations that view bankruptcy in a dim light and can make it troublesome for you.
What I would certainly propose is that you do your own research here, do the groundwork and investigate that process first prior to filing for bankruptcy because that may help you make a decision. Check if your specialty is on the list below. If it is, I ‘d talk to them personally and explain your situation. Some organizations won’t have a problem with your bankruptcy provided that it wasn’t accompanied by shady or doubtful behavior.
If you think you employment may be affected by your possible bankruptcy phone us here at Bankruptcy Experts Mount Isa on 1300 795 575.
BANKRUPTCY AND INCOME
Will my income level be affected if I go bankrupt?
The answer to the question is perhaps. The very first thing you need to know about going bankrupt is there is no limitation on just how much you can earn. However, I will identify that your income is a significant factor when working through whether you need to go bankrupt.
The first thing you have to know is how much you can earn before you start paying back money to your creditors via your trustee (see summary below).
Net income is the pre-tax / in the hand amount you earn per year. A dependant is someone who resides with you and earns less than $3,124 annually (irrespective their age).
You can make an application for a hardship variation that raises the threshold amount, if you have expenses such as medical, child care, significant travel to and from work, or a scenario where your spouse used to work but is no longer able to contribute to the household income.
Child support is always considered in bankruptcy, if you receive child support that is not factored in as income. If you pay child support this will be also considered, for example if you pay $5,000 child support each year and you have no dependants living with you then your revised net income limit would be $55,332.10.
If you need more details about your income thresholds shoot ahead and download “The Big 5” E-book. there are some cases due to income that it is not an economically viable option to file for bankruptcy because you earn too much in comparison to the debt you have.
Just how much of my pay can I keep?
Below is laid out for you the base amounts that you exclude of your incomes during the period of your bankruptcy. The Threshold Amount that you can keep is essentially your in the hand income after tax and child support (if applicable) is deducted. If you’re in your own business whilst bankrupt, then naturally it’s also after net (after tax) business expenses.
Your net income will be adjusted to take into account things like salary sacrifice and excessive superannuation payments etc. Your bankruptcy trustee will have to determine your real net income according to the bankruptcy rules.
The income threshold amounts are also per person, and they are adjusted by the government every March and September to take into account the movements in the cost of living.
With no dependents your net income may be $52,543.40 net per per year, i.e. that’s approximately $1,010.45 net per week in the hand pay. This is your spending money. It’s all yours, it’s what you can keep, and so everything over that is split 50/50 with your bankruptcy trustee.
With 1 dependent your net income can be $62,001.21 net per annum, i.e. approximately $1,192.33 net per week in the hand pay. This is your pocket money. It’s all yours, it’s what you can keep, and so anything over that is split half and half with your bankruptcy trustee.
With 2 dependents your net income may be $66,730.12 net per per year, i.e. approximately $1,283.27 net per week in the hand pay. This is your pocket money. It’s all yours, it’s what you can keep, and so everything over that is split 50/50 with your bankruptcy trustee.
With 3 dependents your net income may be $69,357.29 net per per year, i.e. an average of $1,333.79 net per week take home pay. This is your spending money. It’s all yours, it’s what you can keep, consequently anything over that is split 50/50 with your bankruptcy trustee.
With 4 dependents your net income can be $70,408.16 net per per year, i.e. an average of $1,354.00 net per week take home pay. This is your spending money. It’s all yours, it’s what you can keep, and so anything over that is split 50/50 with your bankruptcy trustee.
With 4 + dependents your net income can be $71,459.02 net per annum, i.e. around $1,374.21 net per week in the hand pay. This is your pocket money. It’s all yours, it’s what you can keep, and so anything over that is split 50/50 with your trustee.
If you believe that your condition is more challenging, then please get competent advice. If you have a particular income question just call us on 1300 795 575.
What can my partner earn if I go bankrupt?
There is no limit to what your loved one can earn. Your loved one can earn a million dollars and they will not be required to contribute to your debts.
What if my spouse/partner and I both need to go bankrupt?
If a husband and wife each declare bankruptcy, and say that they’ve got no dependants, then they can each earn $1,010.45 net. A practical way to understand it is the same income rules apply for each person in the home.
Who is considered a dependent?
When it come to bankruptcy a dependent is anyone you support who earns less that $3,343 each year.
BANKRUPTCY AND SELF EMPLOYMENT
Will I lose my business if I declare bankruptcy?
The simple answer is you don’t have to but you do need to get the right advice. Corporate insolvency laws are very involved and you have to tread carefully if you intend to continue to be self-employed.
You may already understand that you can no longer be the director of a Pty Ltd Company if you are bankrupt, nevertheless that doesn’t automatically mean you can’t run your own business and employ staff etc.
What if my business has serious debts?
As a part of your bankruptcy we can help you erase your business debts so you can get a fresh start.
Should I put my company into liquidation?
One of the main reasons you may wish to consider liquidation in contrast to bankruptcy is because if you liquidate your company, it doesn’t essentially mean you have to go bankrupt. In Australia, businesses that become insolvent have a few alternatives, such as liquidation, voluntary administration and so forth. If you would like to know more about liquidation and company re-structuring, go to the next page of this website, as there is a lot more about it there and or download “The Big 5” e-Book. Don’t forget, it’s the individuals who go bankrupt, not businesses.
This is a complicated area, so get some qualified advice on this one if you have an enterprise. Commonly speaking, the debts in a business and personal debts go hand in hand when a company owner declares bankruptcy.
What impact will bankruptcy have on my business?
A restriction that applies when you are bankrupt as a business owner is that you can be in your own business as a sole trader only. For some business owners, bankruptcy influences their capability to run the business because of the licensing issues discussed in chapter two. For example, if you run a building company, your license will be suspend once you’re bankrupt and as a consequence you can no longer trade without that license.
Isn’t it illegal to run a similar business after bankruptcy?
It could be. There are factors to consider when and if you go bankrupt as a business owner: you can not rack up heaps of debt in your business, then declare bankruptcy and then open the doors the next day like nothing has happened. There are laws in place to prevent what is called “phoenix companies” popping up out of the ashes of an old company.
Don’t get overly stressed about what you can and can’t do as a business owner; just get the right advice and call Bankruptcy Experts Mount Isa now 1300 795 575.