At times, you may be feeling burdened by the mounting bills that are coming in each week.
At some point, it may feel like there’s no way out and your best option is to declare bankrupt. If you are overcome by bills and you are looking at filing for bankruptcy, there are 4 ramifications you must take into account first.
Before filing for bankruptcy, be sure to know where you stand with these top 4 issues people face when going through insolvency.
Whenever it involves filing for bankruptcy in Australia, the procedure will typically last for 3 years a lot of the time and for that 3 years your credit history file will be registered with a ‘bankruptcy’ on it.
This basically means you will not have the option to borrow money. At the end of your 3 years you will be a ‘discharged bankrupt’.
What this means is that your credit file will not state you are currently bankrupt. Instead, it is going to say you used to be bankrupt.
What this implies is that only specific creditors will permit you to borrow money for things like residential properties and automobiles at a slightly increased rate of interest, but if your income level is ok then you may likely be alright.
In many cases by the time a person files for bankruptcy in Australia, their credit history file is so broken that the impact personal bankruptcy has on their credit record is of no real implication as they can not borrow money anyway.
When individuals ask about filing for bankruptcy I’m commonly asked ‘what possessions will I lose when I apply for insolvency?’ Your home possessions are not going to be impacted.
The assets that you will sacrifice will be big items like cars, boats, houses etc. You can possess a car to the value of $7,500 in equity.
So to put it basically if you have a $20,000 car with a $20,000 car loan attached you can keep it as its got no equity in it. It’s not the complete market value that matters in this scenario it’s the equity or the difference between the loan and the market value of the car.
For the 3 years you are bankrupt you may be required to give some of your earnings back towards your personal debt.
There certainly are some factors to consider with this element of your earnings though. If you provide any child support that comes out of your earnings first, your take-home pay will be identified once you pay your tax and then child support. What’s left is your net income.
In the event that you are a couple and you together declare bankruptcy these numbers are based upon individual earnings not added together. So with no dependents each partner can make $1,010.45 in the hand weekly.
If one partner in a partnership is insolvent the non bankrupt partner can earn any income as it’s not actually factored into the equation.
If you are self employed or your earnings is irregular the figure will be calculated yearly and not weekly. If you make over the threshold quantity weekly then you would be required to contribute each week from your wages.
But this is actually crucial when it concerns Filing For Bankruptcy since, if you do not chip in from your salary like you are expected to, the ramifications are serious. Your bankruptcy can be prolonged up until you do re-pay the required sum.
The bottom line with personal bankruptcy and international journeys is straightforward.
If you obtain the correct guidance and declare personal bankruptcy correctly in the first place, then you will certainly not have a problem vacationing abroad as regularly as you desire even though you are insolvent.
So whether you’re thinking of travelling at some point after becoming bankrupt, or you’re concerned about any income you will earn, it is best to get the right advice.
If ever you are concerned with respect to any of such troubles in filing for bankruptcy about assets, income, credit rating, and travel restrictions give us a call here at Bankruptcy Bendigo on 1300 795 575.