If you reside in the Coffs Harbour region and you are having problem with your Personal or Business Debts?
Then give Bankruptcy Coffs Harbour a call. If your debts completely out of control, then maybe the notion of bankruptcy has gone through your mind, and now you have finally taken the next and most challenging step learning whether or not bankruptcy is right for you. Just the notion of it is devastating enough having it become a reality. We understand that there is an overwhelming sense of failure in this process. Maybe you are feeling immobilised and like you have no alternatives.
You Can Be 100 % Debt Free!
Can you picture a future free from creditors harrassing phone calls and looking forward to the mail again. There are a few things you should know before you make that very hard decision. Firstly, the sooner you act the more options you will have.
5 Questions you must answer before you declare yourself bankrupt.
Second of all, 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 web page it will address these questions specifically and give you assurance that you are doing the right thing.
Is Going bankrupt my only choice?
No! There are several options available to you. Below is a graph describing the advantages and disadvantages of various debt options, this chart is by no means all-encompassing but it will enable you to make a well informed decision.
What is a Personal Insolvency Agreement?
This is adaptable agreement between you and your lenders. It is managed through a trustee who administers 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 get to keep important assets.
- The debtors assets are independently handled
- Lower legal costs associated with court proceedings
Cons – Personal Insolvency Agreements
- You are not free until you have paid debt
- It may take several years to pay off the debt
- It still impacts your credit score for 7 years the exact same as bankruptcy
- You cannot be a company director until the debt is paid off
- You are required to have a meeting with your creditor one-on-one
- Your details will be published in a local paper.
What is a Debt Agreement?
A debt agreement enables a debtor to enter into 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 get in touch with us on 1300 795 575
Pros – Debt Agreement
- Avoid Bankruptcy
- Stops creditors – can not take any further actions to recover their debts;.
- You may have the ability to keep important assets.
Cons – Debt Agreement.
- There is an upfront cost to start off.
- You have to be approved. If you don’t make enough you will be refused.
- If you don’t make your payments the agreement may be terminated and then the creditors can resume collection of their debts;.
- The debtor details will turn up on the National Personal Insolvency.
- Index (NPII) from the date that the debt agreement proposal was agreed to by ITSA.
- It still 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 business say Debt Agreements or Personal Insolvency Agreements are the way to eliminate my debts?
The reason you find plenty of expensive commercials on the TV in the Coffs Harbour area inviting you to go for one of these alternatives is there is lots of cash in it for the companies that administer to them. You will notice if you haven’t already that every company has the tendency to give (biased) advice according to the product that they offer. For instance Debt Agreement Companies ridicule bankruptcy companies and so it goes with much of the financial services industry.
Should I consider a Debt Consolidation Loan?
There is the very occasional conditions where a debt consolidation loan is the best idea. Usually however the issue with them is all it is really doing is bundling 5-15 various 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 bill. Just to make it all worse you typically have to pay up front for the pleasure of this choice.
If you wish to get some clarification on this simply contact us on 1300 795 575 or go and download “The Big 5” e-Book.
BANKRUPTCY AND THE FAMILY HOME
If I file for bankruptcy can I keep my house?
In many cases the answer is yes. If this is a serious issue for you then the best way to get the solution is to call us here at Bankruptcy Experts Coffs Harbour on 1300 795 575 and once we have learnt about your predicament we can give you a clear picture over the phone.
Practically everyone is emotionally connected to their house, its where the kids have grown, its where you enjoy life on a day to day basis. People often think its an inescapable repercussion of bankruptcy and consequently they pressure themselves to the brink of madness to not lose the family home.
Will the bank let me keep my house even if I’m a bankrupt?
Why you might ask would the bank want bankrupt customers wouldn’t they want to sell your house and not take the chance? The bank that has kindly lent you the money for your house is making good money every month in interest from you, month in month out, as long as you keep up to date with your payments then the bank wants you in there at all costs. Ultimately however it’s not the bank’s call if the trustee decides that there is enough equity in your house the trustee will compel you and the bank to sell your home.
What things determine if I will lose my home?
If you are up to date with your repayments then the most significant issue is equity. The trustee has a duty to gather as much money to help pay your bills once you go bankrupt. Equity is the ticket here. If you have $300,000 equity in your home and you have $100,000 worth of debt and no other way to pay the debt then the trustee sees your equity as a way to pay back your debt, so the trustee will sell your house repay the debt and give you whatever remains.
How is equity determined?
Usually a registered valuer from the Coffs Harbour area is the best and safest way to identify your current equity position, before you race out and get the local real estate agent to give you a Mickey Mouse evaluation call us for how to go about this process so that you can have peace of mind 1300 795 575. Or for a more substantial illustration about how your home will be considered do not hesitate to download “The Big 5” e-book.
Suppose my partners name is on the house loan?
Another huge consideration is possession, oftentimes houses are acquired in joint names. In other words a couple may have bought a house 50/50 using both earnings to make the payments. If one party declares bankruptcy and the other partner doesn’t, the equity is only calculated on the 50 % of the house.
So basically if you have a home 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 alternatives when if comes to my home?
No not really there are many alternatives available to you when it comes to your house or any other asset when declaring bankruptcy. You will need to get the right advice about this however, getting it wrong could be disastrous. If you have questions don’t hesitate to phone us about your house on 1300 795 575.
BANKRUPTCY AND EMPLOYMENT
Will my employer be advised?
Who will know about my bankruptcy?
There are 4 groups of people that will learn that you are bankrupt. 1. Individuals you tell. 2. Your creditors or people you owe money to. 3. Individuals 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 history. You only ever do this we you apply for a loan. 4. You will be listed on the National Insolvency Index it on the net somewhere, its hard to find and you need to pay to see if someone is bankrupt on it.
At Bankruptcy Experts Coffs Harbour we are perfectly conscious that there is still a stigma about bankruptcy we understand this concern as a matter of fact we can help ensure that if you declare yourself bankrupt you don’t 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 easy and quick. In fact the whole process will only take a handful of days. It makes it possible for the average punter 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 file for bankruptcy?
The answer to the question is in some cases. The trouble with some occupations 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 suggest is that you do your own research here, do the homework and investigate that process first prior to filing for bankruptcy because that may help you decide. Check if your job is on the chart below. If it is, I ‘d talk to them personally and describe your situation. A few organizations won’t have a problem with your bankruptcy as long as it wasn’t accompanied by shady or suspicious behavior.
If you think you employment may be impacted by your possible bankruptcy call us here at Bankruptcy Experts Coffs Harbour on 1300 795 575.
BANKRUPTCY AND INCOME
Will my earnings be impacted if I go bankrupt?
The answer to the question is possibly. The first thing you need to know about going bankrupt is there is no restriction on how much you can earn. However, I will point out that your income is a significant consideration when working through whether you need to declare bankruptcy.
The very first thing you have to know is just 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 each year. A dependant is someone who lives with you and earns less than $3,532 per year (no matter their age).
You can obtain a hardship variation that raises the threshold amount, if you have expenses such as medical, child care, substantial travel to and from work, or a circumstance where your spouse used to work but is no longer able to add 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 taken into consideration, for example if you pay $5,000 child support annually 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 go ahead and download “The Big 5” E-book. there are some cases as a result of income that it is not an economically viable option to declare bankruptcy because you earn too much in comparison to the debt you have.
What is your money worth in 2017?
Developments are coming to the world of bankruptcy, if you need to know what is happening, then listen here. Since March 2016 there has really been updates to the Income Threshold Amounts. This means that there are changes to just how much money you can keep when bankrupt, this is basically your net income right after tax and child support (if applicable) is deducted. If you’re in business whilst bankrupt, then of course it’s also after net (after tax) business expenses, which is typically calculated annually.
Your net income may be regulated to take into account things like salary sacrifice and substantial superannuation payments etc. Your net income might also allow additional unusual costs incurred as a result of being employed, for example if you are subjected to an unusually high amount of travel costs to get to and from your job this can occasionally also be considered. Your bankruptcy trustee must establish your real net income according to the bankruptcy rules.
The income threshold totals are also per person, and are corrected by the Government each and every March and September to allow the movements in the cost of living.
As of March 2017 the income thresholds are as follows;
With no dependents your net income can be $55,446.30 net per annum, i.e. that’s approximately $1,066.23 net each week take home pay. This is your cash. It’s all yours. It’s what you can hold, and so anything over that amount is partition 50/50 with your bankruptcy trustee to be settled to your creditors.
With 1 dependent your net income can be $65,426.63 net per annum, i.e. approximately $1,258.15 net weekly take home pay.
With 2 dependents your net income can be $70,416.80 net per annum, i.e. an average of $1,354.12 net weekly take home pay.
With 3 dependents your net income can be $73,189.12 net per annum, i.e. around $1,407.43 net per week take home pay.
With 4 dependents your net income can be $74,298.04 net per annum, i.e. about $1,428.75 net each week take home pay.
With greater than 4 dependents your net income can be $75,406.97 net per annum, i.e. an average of $1450.08 net weekly take home pay.
If you feel like your circumstance is more complex, then simply get professional advice. If you have a specific income question just give us a call here at Bankruptcy Experts Coffs Harbouron 1300 795 575.
What can my partner earn if I go bankrupt?
There is no limit to what your spouse can earn. Your other half 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 go bankrupt, 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?
In the case of bankruptcy a dependent is anyone you support who earns less that $3,532 per year.
BANKRUPTCY AND SELF EMPLOYMENT
Will I lose my small business if I go bankrupt?
The simple answer is you don’t have to but you do need to get the right guidance. Company insolvency laws are very involved and you need to tread carefully if you wish to continue to be self-employed.
You may already recognize that you can no longer be the director of a Pty Ltd Company if you are bankrupt, even so that doesn’t inevitably mean you can’t run your very own business and employ staff etc.
What if my business has serious debts?
As a part of your bankruptcy we can help you wipe out your business debts so you can get a fresh start.
Should I put my company into liquidation?
Among the main reasons you may wish to consider liquidation as opposed to bankruptcy is because if you liquidate your company, it doesn’t inevitably mean you have to go bankrupt. In Australia, businesses that become insolvent have a few options, such as liquidation, voluntary administration and so forth. If you need 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 difficult area, so get some expert advice on this if you have an enterprise. Commonly speaking, the debts in a business and personal debts go hand in hand when a company owner goes bankrupt.
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 ability 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 considerations when and if you declare bankruptcy as a business owner: you can not run up heaps of debt in your business, then go bankrupt and then open the doors the next day like nothing has happened. There are laws in place to prevent what is called “phoenix companies” rising up out of the ashes of an old company.
Don’t get overly stressed about what you can and can’t do as a company owner; just get the correct advice and call Bankruptcy Experts Coffs Harbour today 1300 795 575.