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What is bankruptcy and what are the alternatives?
To claim bankruptcy in Australia, you will need to lodge a Debtors Petition for Bankruptcy and complete a Statement of Affairs with the Australian Finacial Securities Authority (ASFA).
To most people this is a daunting experience. We highly recommended that you consult someone who has expert knowledge about bankruptcy and can help you through this process.
It is important that you understand what you are entering into and what restrictions might be placed on you once bankrupt. Without expert advice, you might make matters worse than before bankruptcy.
Part IX Debt Agreement
A Part IX Debt Agreement is a formal arrangement with your creditors to repay all or part of the debt over a period of time as outlined in the agreement. Interest is suspended, so your payment reduces the principle by the amount paid. You must be insolvent to qualify.
A DA is administered by a Government appointed D. A. Administrator and both creditor and debtor must correspond with the Administrator. The creditor can no longer correspond with or contact the debtor.
Conditions apply for a Debt Agreement. Call for obligation free chat.
An Informal Arrangement is where you make an offer to each of your creditors separately.
It is generally a lump sum offer that the creditor agrees to accept and usually offered by a third party.
Generally, with an informal Arrangement, the creditor agrees to take your name off the Veda Credit File. Previously
I can’t file for Bankruptcy because I have a job.
FALSE. Most people who file for bankruptcy have jobs. There is no benefit to
I will have to make payments to the government if I go Bankrupt.
MOST PEOPLE DON’T. You will only have to pay if your income is over a certain limit. In the example above the person who has 2 Dependants earns $1398 a week and doesn’t have to pay anything. A person with no
Only losers go Bankrupt.
FALSE. No body plans for debt to get out of control. The fact you were able to get and manage credit means you are a winner. Bankruptcy laws were made because the government knows that good people can hit bad times. During bad times good people need help and do seek help as well. You are not a loser!
They will say I can afford my debts.
FALSE. You would be surprised what “they” think people can and can’t afford. Think about this! You are allowed to go Bankrupt and as a person with 2 Dependents, you can earn $1398 a week and not have to make any payments. Now, do you think that “they” think someone with $25,000.00 worth of debt and only earning $700.00 a week can afford their debts? “They” are generally amazed at how long you have struggled for.
I can’t ever buy a house for the rest of my life.
FALSE. Just because you go bankrupt it doesn’t mean you are barred for life from buying a house. In
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