If you live in the Cairns region and you are struggling with your Personal or Business Debts?
Then give Bankruptcy Cairns 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 courageous step discovering whether or not bankruptcy is ideal for you. Just the thought of it is devastating enough without having it become a reality. We understand that there is a tremendous sense of failure within this process. Maybe you are feeling stuck and like you have no options.
You Can Be 100 % Debt Free!
Can you think of a future free from creditors phone calls and enjoying the mail again. There are a handful of things you must know before you make that very difficult decision. Firstly, the sooner you act the more choices you will have.
5 Questions you must acknowledge before you go bankrupt.
Second of all, there are 5 vital questions you must have an answer to before you declare bankruptcy, if you want to know what they are don’t hesitate to download the free-Book on the right hand side of this page it will discuss these questions in detail and give you confidence that you are doing the right thing.
Is filing for bankruptcy my only choice?
No! There are several options available to you. Below is a chart outlining the pros and cons of various debt options, this chart is by no means all-encompassing but it will make it possible for you to make an informed decision.
What is a Personal Insolvency Agreement?
This is flexible agreement between you and your creditor. It is managed through a trustee who conducts to how much you need to pay and when etc. Once those conditions have been met you are then free to start again with a fresh start.
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 50 to 70 cents in the dollar to your creditors
- It can 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 the entire debt
- It may take several years to clear up the debt
- It still impairs your credit rating for 5 years the same as bankruptcy
- You can not be a company director until the debt is settled
- You are required to meet in person your creditor in person
- Your details will be published in a local paper.
What is a Debt Agreement?
A debt agreement permits a debtor to participate in 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 phone 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 expense to begin.
- You need to be approved. If you don’t earn 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 show up on the National Personal Insolvency.
- Index (NPII) from the date that the debt agreement proposal was approved by AFSA.
- It still affects your credit rating for 5 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 go?
The reason you find loads of expensive ads on TV in the Cairns region inviting you to sign up for one of these alternatives is there is plenty of cash in it for the business that manage to them. You will notice if you haven’t already that every establishment tends to give (biased) advice according to the product that they offer. As an example Debt Agreement Companies ridicule bankruptcy companies and so it goes with much of the financial services industry.
Should I think about a Debt Consolidation Loan?
There is the exceptional circumstances where a debt consolidation loan is the right choice. Generally however the trouble with them is all it is actually doing is bundling 5-15 various loans into one huge loan. If you are having a hard time to pay all your different loans now why do you think it will be magically easier to have one enormous bill. Just to make it all even worse you typically have to pay up front for the luxury of this deal.
If you want to get some advice 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 go bankrupt can I keep my home?
Oftentimes the answer is yes. If this is a major issue for you then the best way to get the answer is to phone us here at Bankruptcy Experts Cairns on 1300 795 575 and once we have understood your situation we can give you a clear picture over the phone.
Essentially everyone is psychologically connected to their home, its where the children have grown up, its where you enjoy life on a day to day basis. People generally think its an unavoidable repercussion of bankruptcy and as a result 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 may ask would the bank want bankrupt customers wouldn’t they wish to sell your house and not take the chance? The bank that has generously lent you the cash for your house is making good money every month in interest out of you, day in and day out, provided that you maintain 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 determines that there is plenty of equity in your home the trustee will require you and the bank to sell your home.
What factors determine if I will lose my house?
If you are up to date with your payments then the most significant issue is equity. The trustee has a duty to gather up 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 house 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 repay 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 Cairns area is the very best and safest way to determine your current equity position, before you rush out and get the local real estate agent to give you a micky mouse evaluation contact us for how to go about this process so that you can have peace of mind 1300 795 575. Or for a better illustration about how your home will be considered do not hesitate to download “The Big 5” e-book.
What if my partners name is on the house loan?
Another huge issue is possession, in many cases houses are bought in joint names. Put simply a couple may have acquired a house 50/50 using both incomes to make the repayments. If one partner files for bankruptcy and the other partner doesn’t, the equity is only factored on the 50 % of the home.
So basically if you have a house in joint names and your total equity position is $100,000 then your actual equity is fifty percent of that $50,000.
It seems like I have very few choices when if comes to my home?
No not really there are several options available to you when it comes to your house or any other asset when going bankrupt. You have to get the right assistance about this however, getting it wrong could be disastrous. If you have questions feel free to call us about your house on 1300 795 575.
BANKRUPTCY AND EMPLOYMENT
ll my employer be notified?
Who will be told my bankruptcy?
There are 4 groups of people that will be told that you are bankrupt. 1. The people 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 release for them to access your credit report. 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 have to pay to see if someone is bankrupt on it.
At Bankruptcy Experts Cairns we are entirely conscious that there is still a stigma about bankruptcy we recognize this concern in fact we can help make sure that if you declare yourself bankrupt you will not 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 simple and quick. In fact the whole process will only take a couple of days. It permits 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 maybe. The concern 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 see bankruptcy in a dim light and can make it challenging for you.
What I would undoubtedly advise is that you do your own prep work here, do the research and investigate that process first prior to filing for bankruptcy because that may help you make a decision. Check if your specialty is on the chart below. If it is, I ‘d speak to them personally and describe your situation. Several affiliations won’t have a problem with your bankruptcy as long as it wasn’t accompanied by shady or dubious behavior.
If you think you employment may be affected by your possible bankruptcy phone us here at Bankruptcy Experts Cairns on 1300 795 575.
BANKRUPTCY AND INCOME
Will my earnings be impacted if I go bankrupt?
The answer to the question is perhaps. The first thing you need to know about going bankrupt is there is no constraint on just how much you can earn. However, I will point out that your income is a serious factor when working through whether you have to go bankrupt.
The very first thing you have to know is just how much you can earn before you start repaying money to your creditors via your trustee (see graph below).
Net income is the pre-tax / in the hand amount you earn each year. A dependant is someone who resides with you and earns less than $3,532 annually (irrespective their age).
You can apply for a hardship variation that raises the threshold amount, if you have expenses such as medical, child care, significant travel to and from work, or a situation where your spouse used to work but is no longer able to contribute 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 considered, for example if you pay $5,000 child support annually and you have no dependants living with you then your revised net income threshold will be $55,332.10.
If you need more information and facts about your income thresholds shoot 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 file for bankruptcy because you earn too much in comparison to the debt you have.
What is your money worth in 2017?
Changes are coming to the world of bankruptcy, if you need to know what is happening, then pay attention here. As of March 2017 there has certainly been developments to the Income Threshold Amounts. This shows that there are changes to how much money you can retain when bankrupt, this is pretty much your net income following tax and child support (if applicable) is deducted. If you’re in business when bankrupt, then of course it’s also after net (after tax) business expenses, which is normally calculated annually.
Your net income can be fine-tuned to allow for things like salary sacrifice and excessive superannuation payments etc. Your net income might also allow for extra unusual costs incurred as a result of being employed, for example if you bear an unusually high amount of travel expenses to get to and from your job this can occasionally also be considered. Your bankruptcy trustee needs to decide on your real net income according to the bankruptcy rules.
The income threshold figures are also per person, and are adjusted by the Government every March and September to allow for 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 about $1,066.23 net every week take home pay. This is your spending money. It’s all yours. It’s what you can always keep, and so anything over that amount is split 50/50 with your bankruptcy trustee to be paid to your creditors.
With 1 dependent your net income can be $65,426.63 net per annum, i.e. approximately $1,258.15 net each week 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. about $1,407.43 net weekly take home pay.
With 4 dependents your net income can be $74,298.04 net per annum, i.e. an average of $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 every week take home pay.
If you think your condition is more complicated, then feel free to get specialist advice. If you have a specific income question just contact us here at Bankruptcy Experts Cairns on 1300 795 575 .
What can my partner earn if I go bankrupt?
There is no limit to what your partner can earn. Your spouse can earn a million dollars and they will not be required to contribute to your debts.
What if my spouse/partner and I both should declare bankruptcy?
If a husband and wife each go bankrupt, and say that they’ve got no dependants, then they can each earn $939.23 net. An easy 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 business if I declare bankruptcy?
The simple answer is you don’t have to but you do need to get the right guidance. Corporate insolvency laws are very complicated and you have to tread carefully if you intend 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 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 clean slate.
Should I put my company into liquidation?
One of the main reasons you may wish to consider liquidation in contrast to bankruptcy is because if you liquidate your company, it doesn’t inevitably mean you need to go bankrupt. In Australia, businesses that become insolvent have a few choices, such as liquidation, voluntary administration and so on. If you want to know more about liquidation and company re-structuring, go to the next page of this website, as there is much 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 challenging area, so get some expert advice on this one if you have a company. Usually speaking, the debts in a business and personal debts work together 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 capability to run the business because of the licensing issues discussed in chapter two. For instance, if you run a building company, your license will be suspend once you’re bankrupt and consequently you can no longer trade without that license.
Isn’t it illegal to run a similar business after bankruptcy?
It can be. There are considerations when and if you go bankrupt as a business owner: you can not rack 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” popping up out of the ashes of an old company.
Don’t get overly worried about what you can and can’t do as a company owner; just get the right advice and call Bankruptcy Experts Cairns today 1300 795 575.