Release from almost all of your debts means going through the process of declaring bankruptcy. In Brisbane, declaring bankruptcy Brisbane means applying for it voluntarily and letting either the AFSA (Australian Financial Security Authority) or a private trustee manage your financial affairs.
If you are earning or have assets that are above the approved threshold of AFSA, you may be required to pay a fee. The official declaration of bankruptcy will have to come from AFSA.
After two weeks from the official declaration, AFSA will then nominate a trustee to oversee the status of your finances. It will take three years before the declaration of bankruptcy is lifted.
You can be forced to declare bankruptcy when you owe at least $5,000 to creditors that have unsuccessfully tried to make you pay. Opting for a private trustee to manage your finances in this kind of situation may mean additional expense on your part.
The declaration of bankruptcy can either encourage you to start anew or have an immediate adverse effect right off and into the future. What happens when you declare bankruptcy?Bankruptcy may:
§ Be viewed positively as something that can start you anew financially.
§ Have an adverse impact when no financial institutions will lend you money for three years, limit your options for future employment, and losing significant assets such as your home.
If creditors are pursuing you for unpaid debts, it’s time to decide and act quickly. You need to consult a financial counselor to learn more about the options of managing your debts. Consulting with a financial counselor will make you understand the good and bad effects of bankruptcy and know what the best option to choose.
Outcomes of Declaring Bankruptcy
§ Any reasonably priced personal effects such as furniture, TV, and computer is exempt from the regulations of bankruptcy
§ The National Personal Insolvency Index is a public record that will show your declaration of bankruptcy for life
§ Your credit report will show the fact of your bankruptcy for five years
§ You will not be able to borrow money for five years
§ You are allowed to earn an income that meets the amount after-tax threshold
§ You will have to pay contributions to the nominated trustee if your income exceeds the allowed amount threshold. This contribution will be paid to your creditors.
§ Your bankruptcy does not exempt you from paying all court fines, Higher Education debts, and child support.
Assets you can keep after the Declaration of Bankruptcy
§ $1,000 in your bank account
§ Common household items such as a computer, furniture, and TV
§ Trade tools valued at $3,750
§ A Vehicle that has equity of less than $7,700
§ Personal injury compensation payments, superannuation, and life insurance
Assets you can’t keep after the Declaration of Bankruptcy
§ Land, houses, and other real estate assets
§ A Vehicle with an equity of more than $7,700
§ Expensive electronic items and valuable personal effects such as antiques
§ Trade tools valued over $3,750
§ Jewelry and valuable artworks
§ Winnings, inheritance, and tax refunds
§ Over $1,000 money in the bank
One of the most difficult decisions you’ll make in your lifetime is to declare bankruptcy. It can be an extremely stressful and devastating situation for most people.