What is bankruptcy in Australia?

Bankruptcy, also known as voluntary bankruptcy or personal bankruptcy is the process by which you legally declare that you will not be able to pay your debts. There are no limits on the amount of debt and there are no bankruptcy filing fees. However, depending on your financial situation, there may be fees for filling out the bankruptcy papers and managing them. 

To be eligible for bankruptcy, you must 

Demonstrate that you will not be able to pay your debts if you have a business, residential or residential connection in Australia or live in Australia.

It is important to note that under the Bankruptcy Act of 1966, you have other options. You should file for voluntary bankruptcy should only be considered after you have exhausted all other debt-relief options. 

Filing for bankruptcy will have long-term effects. Get a free financial consultation to weigh all of your options and decide whether bankruptcy experts are the right solution for you.

How does bankruptcy work?

You have several options for filing for bankruptcy. You can voluntarily file for bankruptcy through a debtor filing, or your creditors can file for bankruptcy through a court known as a creditor filing or you can get in touch with Australian Bankruptcy Service

Once declared bankrupt, you can appoint a trustee or the Australian Financial Security Agency (AFSA) hires one to manage your finances.

How much maximum debt you do have to have to file for bankruptcy? 

No minimum amount of debt is required to file for bankruptcy. However, if you owe more than $ 10,000 to a particular creditor and the creditor has tried unsuccessfully to recover the debt you owe them, they can force you to file for bankruptcy. 

The types of debt that you can take on in your bankruptcy include: 

  • Credit card debt
  • Utilities 
  • Medical Bills 
  • Unsecured Personal Loans 
  • Payday Loans.

What are the consequences of filing for bankruptcy?

Many people in debt believe that filing for bankruptcy is the only viable solution to their inability to pay off their debts; however, this is not the case. Bankruptcy is supposed to be viewed as a last resort. The bankruptcy declaration has a number of far-reaching consequences that can adversely affect your financial future. Debt negotiators will actively work with you to thoroughly examine all other avenues to financial freedom before considering filing for bankruptcy. Filing for bankruptcy can: result in the sale of your assets such as jewelry, house, car, or furniture as you may be forced to sell assets to pay off outstanding debts

  • result in contributions, depending on the level of your income
  • prospective impact on your present or potential employment
  • Affects your ability to obtain future funding and credit as they may be listed on credit reporting agencies
  • Lead to a limited residence permit for three years abroad.