As a result of the economic downturn, many people have fallen into a difficult position of being insolvent. Unable to pay off their debts on time, this group of people became debtors. When the debtor is hopelessly chased by the creditors and can't sleep at night, the debtor can be freed from the debt by applying for personal bankruptcy and can start a new life again.
What is personal bankruptcy?
In Australia, bankruptcy (Bankruptcy) is a legal process announced when you are unable to pay a debt due personally. Once you declare bankruptcy, this means that you will relinquish control of all your finances and assets and grant this right to trustee (Trustee), in return for creditors' exemption from legal action against you.
Steps related to bankruptcy
While filing for bankruptcy can relieve you of your debt, we recommend that you carefully weigh the pros and cons before making a formal decision to file for bankruptcy and listen to the advice of the insolvency expert. The main steps of filing for bankruptcy are as follows:
- Evaluate all the options before you, and apply for bankruptcy only if you consider the bankruptcy application to be the only best option;
- Are you qualified to file for bankruptcy? For example: when you filed for bankruptcy, you were in Australia and were in a difficult position of being insolvent;
- Listen to the advice of the bankruptcy expert. Actively cooperate with the bankruptcy expert and prepare relevant documents and information;
- Finally, fill in the bankruptcy filing form. Due to the complexity of tables and other required documents, we recommend that you listen to expert advice.
How to apply for personal bankruptcy in Australia
Filing for bankruptcy typically involves an assessment of an individual's assets, where you are insolvent and must be in Australia at the time of application. As filing for bankruptcy in Australia is a complex legal process, you need to entrust an experienced lawyer to represent you and provide you with legal advice on bankruptcy in order to avoid unnecessary losses.
What are the consequences of bankruptcy?
Once you declare bankruptcy, creditors will stop collecting debt from you, including: what you owe personally, debt borrowed from friends and family, and your income and money in your bank account. The bank can no longer recover its arrears from you. But there are some debts you still have an obligation to pay during your bankruptcy, such as court fines, compensation for traffic accidents, utilities and education loans.
At the same time, the trustee can also sell your assets, investigate your transfer of assets and so on. Your name will be kept in the credit report for 5 years and will be restricted when applying for a credit card or loan.
Will I be able to keep my property after the bankruptcy?
In general, you can keep your own house. However, in some cases, your property may be forced to auction to pay off the debt. But you can keep general household items, and some of the tools and vehicles used to generate income.
Can I transfer property and other assets to my wife or family before filing for bankruptcy
Trustees may investigate your assets, including property and other assets. Once it is discovered that you have transferred assets in order to avoid creditors, the trustee has the right to treat the transfer as null and void. At the same time, according to the bankruptcy Act, it is illegal to transfer or dispose of assets before filing for bankruptcy. Of course, specific situation analysis, please contact our insolvency expert.
Will bankruptcy affect my employment, business
Bankruptcy generally does not affect your employment, but it may have a certain impact on your income and employment. For example, certain occupations and licensing agencies will impose restrictions on the occupation or business you are going to engage in; you can no longer become chairman of a company or certain civil service posts, such as councillors, etc.
If you are a self-employed person, you can continue your small business, but your name must be included in the company name you use. After bankruptcy, we will help you reorganize your business and bring it back to the ranks of limited companies.
Will bankruptcy affect my marriage and my family?
Statistics show that falling into financial distress is one of the main causes of divorce. Similarly, divorce has become one of the main reasons for filing for bankruptcy. Although divorce and bankruptcy are two distinct legal procedures, the emotional impact on both parties is consistent. If the husband and wife have decided to divorce and file for bankruptcy, do you want to divorce first, or do you file for bankruptcy first?
Although there is no standard answer, we suggest that both sides listen to their lawyers. Sometimes, filing for bankruptcy before a divorce is better than a subsequent filing, which can significantly reduce the amount of debt the husband and wife share.
Can I go abroad after bankruptcy?
Generally speaking, if you want to leave the country after the declaration of bankruptcy, you must obtain the approval of the trustee. If you leave the country without written approval, it will be considered illegal.
Lawyers helped many financially troubled debtors and put in place financial arrangements for them, including filing for personal bankruptcy, getting them out of trouble and starting a new, debt-free life.
To learn more about personal bankruptcy legal advice and to assess your eligibility for personal bankruptcy, please contact our bankruptcy specialist as soon as possible.
(this article is purely a reference, not a legal recommendation)
Author: Charles Zhu, da de law firm
Pictures: network
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