Bankruptcy Advice from the Experts

Bankruptcy Advice from the Experts

While bankruptcy can actually help get rid of your debts, it’s an option which is not viable for just about everyone. There are several consequences if you choose to go bankrupt and those consequences would have a major impact on your day to day life as well.

So who can actually apply for bankruptcy? The following are instances when it’s perfectly all right to file for bankruptcy.

  • In case you are unable to pay all your debts off
  • You don’t own a great many valuables or there is little or no equity on your home
  • There is absolutely no other option left for you and things don’t look so good either

While there is no set amount of debt you need to have to file for bankruptcy, the general rule of thumb applies. If your debts are more than all the assets that you own then bankruptcy is the only resort for you. Ensure you seek bankruptcy help or advice in Australia to make sure you have all the information required.

When is bankruptcy not an option? In all of the following cases, filing for bankruptcy might not be the right way to go about it. These include all of the following:

  • If you own less than $30’000, and the belongings which you have do not aggregate to more the $2000. In such cases it is better to apply for a debt relief order.
  • If you are working in such a field in which filing for bankruptcy would cancel your license to practice. It holds for people who work as solicitors, accountants and estate agents.
  • You would rather avoid debt problems coming under the public eye
  • If there is a chance that your circumstances would be changing in the near future.
  • If your pension is relatively bigger than your debt, you may not be allowed to file for bankruptcy.

Other factors to consider

Some other factors to consider include the following:

  • Going bankrupt can cost around $1000. Do you own that much amount?
  • You may also lose your home because it would be sold off to pay your debts. If you are renting a home you may not risk losing it. However there are certain conditions when you can’t rent a home especially when you have filed for bankruptcy.
  • It would also have an adverse effect on your credit rating. You may not be able to get a loan or run a business because it would have a negative impact on your credit rating.
  • Any belongings that you own might be sold off to pay off your creditors.
  • Plus make sure you get to know what debts the bankruptcy covers. There are certain debts like student loans of magistrate fees which are not covered by it.

You can even check out alternatives to bankruptcy. Some of these include:

  • Debt relief order works well for those who have less than $30’000 in debt.
  • You can try for individual voluntary arrangement. If you can take out a set amount of cash each month to pay your creditors it can help get rid of the debt in the long run?