- Jan 10, 2017
Any time people stress over Bankruptcy, they think about how it will impact their day-to-day lives, and whether they will be able to retain their home, car, tools, and other essential possessions.
One of the ways that we can work out this out is by using the insolvency means test. It is something that we take our clients through to present to them just how they may or may not be affected, and what Bankruptcy will mean to them.
Personal and household items
Your valuables are always going to be a key aspect of concern with Bankruptcy in Cairns as there is usually an illogical concern that someone will come out to your home to take all your stuff away, retrieve your couch, the television, even the coffee machine. However this is never going to be the case with pure insolvency because often they don’t care about these items. There are a couple of interesting exemptions though with Bankruptcy and belongings so if you have specific worries about this make sure that you get some guidance initially or contact us here at Bankruptcy Experts Cairns on 1300 795 575.
With Bankruptcy you might be affected if you have costly tools. The guidelines explain that you may keep tools of trade up to a limit of $3,700. Having said that bear in mind that this is founded upon ‘current cost’ therefore if you bought your tools for $8,000 5 years ago, they are likely to be worth far less right now. So it is worth thinking about what amount you would anticipate them to be valued at, or how much you could get for all of them if you had to sell them. But as a whole, the government does not want insolvency to become a barrier to you working, so they do not want to refuse you access to your equipment. It is quite a great component of Bankruptcy, but sometimes might be confusing. So when it relates to tools of trade, you don’t have to worry just call us here at Bankruptcy Experts Cairns for some advice.
Individuals are constantly troubled about how Bankruptcy will affect their vehicle. So the guideline is that you can retain one vehicle or motorbike up to the value of $7,600.
This takes into consideration current value, as well as the equity. What does this mean? Well, equity deals with the sum of money you have essentially put into the car, and how much is on a loan. If you have purchased a car for $10,000 without a loan, then the car can likely be sold for that amount, and $10,000 can be raised to pay off your bankruptcy liabilities. However, if you had a vehicle loan for that amount instead then there would be no benefit to selling off your motor vehicle.
How do you value your car? Simplest method is to just have a chat to a used car dealer and inquire just how much they would offer you for it– that will certainly give you a rough idea about how your car will be impacted by this Bankruptcy method. After that you just need to consider the value of your auto loan or financing plan, and whether you are below or above the $7,600 threshold.
If your car is worth greater than these threshold quantities get some help, at Bankruptcy Experts Cairns we help individuals work through their choices when it relates to cars.
The Family Property
Much like with Bankruptcy and vehicles, the approach that will be taken to your residential property will certainly be dependent upon equity. If there is no equity in your home, then there certainly is no purpose in forcing you to sell it. If there is no money to be earned by taking the home off you, then they are hardly ever going to bother. For example if you own a house worth $400,000 and you owe the bank $400,000 then more than likely you will have the chance to keep your house after bankruptcy.
The worst part about all of this though is that going bankrupt does not take into consideration emotions or justifications– you will not simply be able to always keep your vehicle or house because you ‘need it’ or because you have a strong emotional attachment. Bankruptcy may be harsh, but that is the reason why you should make sure you speak to the right people. Do not jeopardize your family home by assuming or wishing you will have the capability to maintain it post-bankruptcy just because you have to live somewhere.
If you are stressed out over your house or any other component of this Bankruptcy Means Test, then call us at Bankruptcy Experts Cairns on 1300 795 575 if you would like to know more about Bankruptcy and Houses or anything to do with Bankruptcy. We are here to really assist you. Visit our website for a lot more information, www.bankruptcyexpertscairns.com.au.
We provide a Free- No Commitment Consultation so contact us today 1300 795 575.