What happens to my Centrelink debts if I go bankrupt?
As a general rule we have always told our potential clients not to count on having your Centrelink debt written off when you declare bankruptcy, however it seems more and more this is not the case.
In most cases it has been our experience that Centrelink will not pursue you for your Centrelink debts*(which is also outlined on the Centrelink website – see link below) for the three years you are bankrupt which is good news for those struggling week to week and need to file for bankruptcy to get some financial relief. What seems to be happening more and more lately is that they (Centrelink) may now just simply write the debt off at the end of the three years also. We had a client just the other day send us a Centrelink letter (See below) stating that not only that they wont pursue the debt for the 3 years of bankruptcy but also that they wont chase you for the debt after you have been discharged. In other words you wont ever have to pay back your Centrelink debt if you file for bankruptcy.
Can I travel to another country?
Yes. All you will want to do is apply to your bankruptcy trustee for consent to go. You’ll get it, but there is a one-page form you will need to fill in simply to notify the trustee of how long you will be taking a trip, etc. This measure is really only there so high flyers don’t skip the country. Sometimes the trustee will request your passport, but don’t stress about it because you can ask for it back when you have to take a trip. Call us if you wish to know more about travel on 1300 795 575.
Can I keep my property?
In many cases the answer is yes! Actually, in many cases nowadays we can help you keep your house. At Bankruptcy Experts we are specialists at guiding people keep their homes. It’s actually very complex, so if you are concerned about losing your home call us on 1300 795 575 and we will guide you through your options.
The notion of losing the family home is probably the most typical obstacle to people declaring bankruptcy. We consult with people regularly who have fought for many years under significant financial pressure so they don’t lose their home.
So how is it possible to become bankrupt and keep your home? Easy, really; it’s a matter of equity. Let’s put it this way, if you have a house that’s worth $350,000 and you owe the bank $350,000 you in reality have no equity in the house, correct? The trustee will only sell off your house if there is sufficient equity in the home if sold to repay a number of your debts. So in this particular case, the trustee will then offer you some alternatives, one of which is to simply to continue paying the mortgage and stay in the house while you are bankrupt.
So how can I determine the value of my home? A quick way is to go onto realestate.com. au and check out the sold houses tab in the Geraldton area and it will show you all the recent sales in your location. Another idea, if you are not sure or are very concerned, is to have a registered valuer do a valuation on your home, not a real estate agent (unless they are registered valuers, obviously). Be advised this will cost you somewhere between $300-700. Just another thing about house prices. If the trustee needs to sell your house they do so reasonably quickly. It’s not a 6-month glossy advertising campaign and instead it’s commonly by auction and they just meet the market on the day and that’s it. So when considering the value remember it’s a sell now price, not when the market picks up.
Once you have determined the value of your house the next thing to look at is ownership.
Generally most home loans are between 2 people as joint tenants who both contribute to the home loan. If only one party is going bankrupt then the equity is worked out like this.
Say your house is worth $400,000 and the current market value is $350,000. Then the balance of equity in the home is $50,000, right? Half of that total equity is automatically assigned 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 on 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 several options. One of which is popular is for the bank to say, “Pay us the $10,000 and we won’t sell the house 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 home.
Just a side note: the financial institution who has given you the mortgage will want the payments to be kept up of course. No matter what the trustee decides, if you don’t pay the lender the loan they will eventually ask you to leave. So, in plain english, keeping the house naturally implies keeping the debt also.
There are many more options with your home, and we have just outlined one option of potentially 20 alternatives you can decide on, when it comes to your house. We understand you will want to get this correct. Gambling with the family home can possibly be a terrible business. If you intend to get the correct advice or you just want to talk to someone give us a call on 1300 795 575.
When would my travel be limited?
Your international travel would be limited by the trustee due to 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 ranking?
Bankruptcy lasts 3 years and will sit on your credit file for that time. Nevertheless, just like any default it will appear on your credit report for 7 years. You can have it removed 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 be able to get loans; you just won’t get the most ideal rate. Your credit file will be wiped clean 4 years after you have been discharged as a bankrupt then you will have an ideal credit report again and you will get the most competitive deal on loans.
Will I lose my car if I go bankrupt?
Typically no. Bankrupts hardly ever lose their cars because they’ve gone bankrupt. Obviously, this is conditional and we can let you know if yours is safe. Call Bankruptcy Experts Geraldton on 1300 795 575.
There is a threshold or amount of wholesale value your car can be worth while you are bankrupt, which is $7,700. You will find all kinds of incorrect information about this on the internet, but here are the facts. That $7,700 represents not the total value; it represents equity. So, simply put, 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 provided you the cash for the car will be content for you to keep the car even though you are bankrupt provided that you continue the payments.
What if I’m behind on my car repayments and I go bankrupt; will they take my car?
Get some advice on this one. If you need some advice immediately 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 monthly payments on your loan the bank will repossess the car. Don’t presume because you are filing for bankruptcy you are automatically going to lose your car because in most cases we help people retain them.
When are the creditors notified of my bankruptcy?
The creditors, or individuals you owe money to, are notified in writing at about the same time you receive your bankruptcy file number.
Will anyone visit my home?
No. The bankruptcy process is ultimately a paperwork exercise. The only thing that actually takes place is you will either be written to or emailed a letter informing you that you are bankrupt. At Bankruptcy Experts Geraldton we ensure that this entire procedure is that easy, 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 entirely get rid of the bankruptcy from your credit history. There are provisions within the Bankruptcy Act that make it possible for a bankrupt individual to have their bankruptcy annulled through a Section 73 proposal.
The repercussions of creditor’s claims can often result in bankruptcy, regardless of regardless if it was the individual’s preference to enter bankruptcy, or if it was filed by a creditor. Nevertheless, bankruptcy is far from the end of the world for the person who experiences bankruptcy.
We have been helping people in the Geraldton area for years so phone us today on 1300 795 575 to get some assistance on this issue. We explore the most suitable possible course of action for you to get back up and running, eliminating residual effects and barriers 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 approaches and methods to bring you through bankruptcy unscathed, ready to start over.
Can I get my bankruptcy annulled?
Firstly, having your bankruptcy annulled is generally reversing it 100 %. So if you are contemplating you would like to have your bankruptcy annulled there are a few things you should know.
Firstly, how does the annulment actually work? A simple way to comprehend it is let’s say someone owes you $50,000 and they haven’t paid you one penny back for many years. Then to make matters worse you find out that they have filed for bankruptcy. You would kiss that money goodbye, right? Many years go by and they come to you with an offer to repay you $5,000 that their uncle is giving to them to settle your debt with them. Of course you are happy to take it, because it is better than nothing. The only condition they ask for in return is that you agree to have the bankruptcy removed from their credit file, 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 process is often referred to as a Section 73 proposal, and it’s an approach where “everybody wins.”.
Essentially the trustee approaches your creditors, puts forward your offer, which is considerably less than the original amount owed, on the condition they wipe your credit history clean.
This process takes a few weeks. The proposal can be done at any time in the 3 years you are bankrupt. However, you need to consider the timing of your proposal. Because it does cost money to do this, you need to make sure the odds are on your side. For instance, 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 in any case so it better be more than that will add up to.
If you have only been bankrupt 3 weeks it will be more challenging 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 assistance to put a section 73 proposal to your trustee or just want more details about the timing of when to put an offer forward, simply give us a call on 1300 795 575.
Can I go bankrupt if I’m currently in a Debt Agreement or Personal Insolvency Agreement or in a Consolidation Loan Contract?
Yes! We can aid you cancel all of these arrangements. With Debt Agreements and Personal Insolvency Agreements we will need to have you released from them first before you declare bankruptcy, but it’s not a problem. If you are tied up into one of these and just can’t climb on top give us ring at 1300 795 575.
What debts won’t bankruptcy erase?
There are very few debts that bankruptcy won’t 100 % eliminate, 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.
Aside from that, it will eliminate things like your credit cards, store cards, GST and tax, unsecured personal loans, etc. Actually, there are too many things to list so if you have a particular debt you are bothered with just call for a free consultation 1300 795 575.
Is there a limit to the amount of debt I can go bankrupt for?
You can’t file for bankruptcy for an amount under $5,000; however, there is no limit beyond that. If you owe a few million dollars, that’s dealt with 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 hold over the chattels/assets/property purchased with the credit given to you. Such debts 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 loan, the creditor has the right to repossess and sell the chattels/assets/property to reduce the debt.
How can I be sure that you will succeed in making me bankrupt?
We have helped countless 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 method we use here, and all you need to do is get a copy of your credit report 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 modest fee.
I’ve had a car accident. Will the debt be covered in bankruptcy?
Vehicle accidents can possibly be difficult, 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 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 proves you were not at fault then you should be okay.
Can I have business debts eliminated with my bankruptcy also?
Yes! We can help you accomplish this, although it’s possible there are effects and lots of regulations around this process, so call us and we will help you through the process on 1300 795 575. Bankruptcy Experts Geraldton are professionals at helping businesses get back on their feet.
Can I pay out my bankruptcy debt and have it annulled?
Yes. There is a course of action 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 carrying this out properly; just call us first.
What if someone is bankrupting me; is there anything I should do?
Generally, if you owe money to someone they can get a court order and bankrupt you. They need to follow a procedure, but it is possible. What you want to avoid at all costs if possible is someone else bankrupting you, as it’s always best to voluntarily declare bankruptcy. Unless you enjoy court cases 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 professional advice; if its handled incorrectly, it could be fatal. For a free consultation phone Bankruptcy Experts Geraldton 1300 795 575.
Do I need to contact my creditors?
No, we do that for you. Actually, we act as an intermediary or a midway point between you and your creditors. So ultimately you are not obligated to update them of your bankruptcy; we do that for you.
How long does bankruptcy last?
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 forgot about at the time of becoming bankrupt?
Don’t panic! If you forgot about a debt and remembered it later, just speak to your trustee with the name of the creditor, address, date the debt was acquired, sum of debt and any account or reference number/s supplied by the lender. Your trustee will add the creditor to your bankruptcy paperwork and mail 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 income and I go bankrupt; will I get in strife?
Normally this is not a problem, so if you are a gambler, don’t worry. What the trustee doesn’t like is inconsistency here. Put simply, you have never gambled in your life and all of a sudden you lost $50,000 on the ponies, 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 call us on 1300 795 575.
What if I’m living abroad; can I still go bankrupt?
Yes. This is attainable. It requires some emails to and fro but it can be carried out.
Can I include my overseas debts in my bankruptcy?
Yes. If an individual originally staying in another country 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 wipe out the debt. It is possible and legal for them, however, to reject your application, and if you go back 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 easiest 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 ought to get some advice about assets; be careful.
Can I keep an inheritance if I file for bankruptcy?
This is complicated and you will need the right guidance, 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 file for bankruptcy?
No. The income thresholds are the same for everyone so regardless of how you earn your income you need to earn about $50,000 per year before your income will be affected by bankruptcy.
Will I have the ability to keep my tax returns once I’m bankrupt?
Yes, if you owe the tax office money. Put simply, if one of your debts is tax debt, then no, the tax office will keep the cash you owe them.
No, if you don’t owe the tax office money. Your tax return is deemed net income, so if you are under the threshold amount you can earn while bankrupt then you will get your whole income 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 have the ability 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 figures are always quoted.
Can I buy shares and make investments while I’m bankrupt?
Yes, you are permitted even while you are bankrupt, but the trustee will take them off you, as they are considered an asset.
What assets can I keep if I go bankrupt?
You can keep just about everything except big things like houses, cars, shares and inheritances. Even things like houses and cars may be able to be spared. Just phone us before you make any rash decisions on 1300 795 575 for Bankruptcy Experts Geraldton.