Declearing Bankruptcy – FAQ

Can I travel offshore?

Yes. All you need to do is apply to your bankruptcy trustee for approval 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 taking a trip, etc. This law 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 worry about it because you can ask for it back when you need to travel. Call us if you need to know more about travel on 1300 795 575.

Can I keep my house?

Oftentimes the answer is yes! Actually, in many cases nowadays we can help you keep your home. At Bankruptcy Experts we are experts at assisting people keep their homes. It’s potentially very complex, so if you are concerned about losing your home call us on 1300 795 575 and we will guide you through your choices.

The thought of losing the family home is probably the most common deterrent to people filing for bankruptcy. We consult with people every day who have battled for many years under enormous financial stress so they don’t lose their home.

So how is it possible to be bankrupt and keep your house? Simple, really; it’s a matter of equity. Let’s put it like this, if you have a home 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 a number of your debts. So in this particular instance, the trustee will then provide you some options, one of which is to simply to continue paying the mortgage and live in the house while you are bankrupt.

So how can I learn the market value of my home? A straightforward way is to go onto realestate.com. au and check out the sold houses tab in the Mount Isa area and it will show you all the recent sales in your location. Another idea, if you are confident 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 thing about house values. If the trustee has to sell your house they do so reasonably quickly. It’s not a 6-month glossy marketing campaign and instead it’s commonly 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 improves.

Once you have determined the price of your house the next thing to review is ownership.

Generally most home loans are between 2 people as joint tenants who both contribute to the mortgage. If only one party is going bankrupt then the equity is calculated this way.

Say the house is worth $400,000 and the current price is $350,000. Then the balance of equity in the home is $50,000, right? Half of that total equity is automatically alloted 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 advertising and marketing etc., which, depending upon where you live, can cost anywhere between $12,000-20,000. In this case say the selling expenses are going to be $15,000 then the balance 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 typical is for the bank to say, “Pay us the $10,000 and we won’t sell the home and you will have it eliminated as an asset from the bankrupt’s estate.” Or, simply put, cut a deal to pay the $10,000 and you can keep your house.

Just a side note: the bank who has given you the mortgage loan will need the repayments to be kept up obviously. No matter what the trustee decides, if you don’t pay the lender the home loan they will ultimately ask you to leave. So, in other words, keeping your house obviously implies keeping the debt also.

There are plenty more options with your house, and we have just detailed one option of potentially 20 options you can choose from, when it comes to your house. We understand you need to get this correct. Gambling with the family home can be an upsetting business. If you intend to get the appropriate advice or you just need to talk to someone call us on 1300 795 575.

When would my international travel be hampered?

Your international 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 report?

Bankruptcy lasts 3 years and will stay on your credit record for that time. However, just like any default it will turn up on your credit record for 7 years. You can have it eliminated if you get your bankruptcy annulled.

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

Bankruptcy lasts 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 very best rate. Your credit report will be wiped clean 4 years after you have been discharged as a bankrupt then you will have an ideal credit record again and you will get the best deal on loans.

Will I lose my car if I go bankrupt?

Generally no. Bankrupts rarely lose their cars because they’ve filed for bankruptcy. Obviously, this is conditional and we can let you know if yours is safe. Contact Bankruptcy Experts Mount Isa 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 kinds of incorrect information about this online, but here are the facts. That $7,350 represents not the total value; it represents equity. So, in other words, 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 gave you the cash for the car will be happy for you to keep the car although you are bankrupt provided that you maintain the payments.

What if I’m behind on my car monthly payments and I go bankrupt; will they take my car?

Get some advice on this one. If you need some advice today 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 the lender will repossess the car. Don’t presume because you are going bankrupt you are automatically going to lose your car because most of the time we help people keep them.

When are the creditors informed of my bankruptcy?

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

Will anyone visit my home?

No. The bankruptcy process is generally a paperwork exercise. The only thing that actually happens is you will either be sent a letter by snail mail or emailed a letter advising you that you are bankrupt. At Bankruptcy Experts Mount Isa we ensure that this entire procedure is that straightforward, so if you have concerns about this call 1300 795 575.

Can I have my bankruptcy annulled?

Yes. This process will take about 2 weeks and will totally 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 consequences 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 experiences bankruptcy.

We have been helping people in the Mount Isa area for many years so call us today on 1300 795 575 to get some insight on this matter. We exercise the best possible procedure for you to get back up and running, removing residual effects and obstacles of past financial circumstances to give you the best possible outcome. Having experience and skills specialising in Section 73 proposals, we can combine this with our proven techniques and methods to bring you through bankruptcy in one piece, ready to start over.

Can I get my bankruptcy annulled?

To start with, having your bankruptcy annulled is basically reversing it 100 %. So if you are thinking you would like to have your bankruptcy annulled there are a few things you need to know.

Firstly, how does the annulment actually work? An easy way to comprehend it is let’s say somebody owes you $50,000 and they haven’t paid you one cent back for years. Then to make things worse you learn that they have gone bankrupt. You would kiss that money goodbye, right? Many years pass and they come to you with an offer to pay you $5,000 that their grandparents is offering to them to settle your debt with them. Obviously you are happy to take it, because it is better than nothing. 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. Naturally you don’t care about their record; you are just happy they are offering you some money after all these years.

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

Essentially the trustee contacts your creditors, presents your offer, which is dramatically less than the original debt owed, on the condition they wipe your credit file clean.

This procedure takes a few weeks. The proposal could be done at any time 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 want to ensure the odds are on your side. As an 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 anyway 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 money from you over the 3 years if you earn over the threshold amount of money.

If you want support to put a section 73 proposal to your trustee or just want more details about the timing of when to put an offer forward, just give us a call on 1300 795 575.

Can I go bankrupt if I’m already in a Debt Agreement or Personal Insolvency Agreement or in a Consolidation Loan Contract?

Yes! We can help you get out of all of these agreements. With Debt Agreements and Personal Insolvency Agreements we need to have you released from them first before you declare bankruptcy, but it’s no problem. If you are locked into one of these and simply can’t climb on top give us call at 1300 795 575.

What debts won’t bankruptcy eliminate?

There are only a few debts that bankruptcy won’t 100 % remove, like Centrelink, child support, HECS and a court-imposed fine (speeding fines, etc.) and, finally, money owed to an insurance company as a result of a car accident in an uninsured car that you were driving.

Besides that, it will cancel things like your credit cards, store cards, GST and tax, unsecured personal loans, etc. Actually, there are way too many things to list so if you have a particular debt you are bothered with just ask 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 under $5,000; however, there is no limit beyond that. If you owe a few million dollars, that’s treated 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 security the chattels/assets/property acquired with the credit given to you. Such liabilities 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 obligation, the creditor has the right to repossess and sell the chattels/assets/property to reduce the debt.

How can I make sure that you will be successful in making me bankrupt?

We have helped thousands of people declare bankruptcy for many 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?

There is a simple strategy we use here, and all you have to do is get a copy of your credit file as it will have your entire credit history on there. Companies like www.veda.com.au 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?

Car accidents can 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 motor vehicle that was not insured then the expense of the repairs is not erased with bankruptcy. Having said that, it depends who admitted liability or who was at fault. If you go to court and the court validates you were not at fault then you should be good.

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

Yes! We can help you accomplish this, although it’s possible there are implications and lots of regulations around this procedure, so call us and we will help you through the process on 1300 795 575. Bankruptcy Experts Mount Isa are experts at helping businesses get back on their feet.

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

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

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

Generally, if you owe money to someone they can get a court order and bankrupt you. They need to follow a process, but it is possible. What you need to avoid at all costs if possible is another person bankrupting you, as it’s always best to voluntarily declare 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 qualified advice; if its handled incorrectly, it could be fatal. For a free consultation phone Bankruptcy Experts Mount Isa 1300 795 575.

Do I have to contact my creditors?

No, we do that for you. As a matter of fact, we work as an intermediary or a midway point between you and your creditors. So ultimately you are not required to inform 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 papers with you for the sum total of the outstanding money owing on the loan.

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

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

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

No. We take care of the entire procedure for you.

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

Typically this is not a problem, so if you are a gambler, don’t worry. What the trustee doesn’t like is inconsistency here. In other words, you have never gambled in your life and all of a sudden you lost $50,000 on the horses, then you might have some explaining to do, of course, because it just doesn’t add up.

Can my bankruptcy be completed the phone?

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

What if I’m living in a different country; can I still file for bankruptcy?

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

Can I include my international debts in my bankruptcy?

Yes. If a person originally staying 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 most cases the creditor overseas will eliminate 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 determine, and the best and simplest way is for you to inform them when we do the paperwork. There is also a government website which has major assets listed also. You have to get some advice about assets; be careful.

Can I keep an inheritance if I declare bankruptcy?

This is tricky and you will want the correct advice, so if you need more information about inheritances give us a call on 1300 795 575.

Will I lose my Pension or Workers Compensation payments if I go bankrupt?

No. The income thresholds are the same for everyone so no matter how you earn your income you need to earn about $50,000 per year before your income will be affected by bankruptcy.

Will I be able to keep my tax returns once I’m bankrupt?

Yes, if you owe the tax office money. Put simply, if none 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 ATO money. Your tax return is viewed as net income, so if you are below the threshold amount you can earn while bankrupt then you will get your whole tax return back.

What about child support ?

If you are required 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 considered 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 spared. Just call us before you make any rash decisions on 1300 795 575 for Bankruptcy Experts Mount Isa.

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