Bankruptcy in Sydney– Voluntary or involuntary bankruptcy?

When it concerns Bankruptcy, there are 2 kinds of individuals– people who have made a decision to declare bankruptcy and people declared bankrupt by others (Their creditors).

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When it comes to Bankruptcy in Sydney, typically people aren’t aware that there can be both voluntary, and involuntary bankruptcy– and this is crucial because often a lot of people don’t know that others can declare them insolvent– and that if this happens you have certain rights and’ obligations attached.

Involuntary bankruptcy:

Involuntary bankruptcy happens when an individual you owe money to involves the court to declare you insolvent. This will result in you being issued with a notice that, typically when you get one of these types of notices, you have 21 days to pay all the debt. If you do not, then the lender goes back to the court and asks the court to provide a sequestration order that proclaims you insolvent. Throughout this time you will have a brief window wherein you can dispute and put your case forward concerning the reason why it should not advance to the next level and the reason why you should not be declared bankrupt. Once the determination has been made, you will be insolvent and experiencing the same steps as those who took that path willingly.

Nonetheless, when it concerns Bankruptcy you can picture that the involuntary procedure is full of even more stress, worry and fear as other people are taking control of your life. My most important suggestion with Bankruptcy and involuntary bankruptcy is that if you believe that it may take place, get professional guidance on bankruptcy as soon as feasible, even if you are just worried about financial debt and fear that it could continue to escalate. I am sure that you can envision that it is better to realise what you can and can’t do before getting forced into that scenario. Once you are insolvent, it’s generally far too late to take steps.

What next?

Well if you have been declared bankrupt, you won’t really have too many options but to move through the process and you will definitely want to get specialist suggestions to make sure you are declaring correctly, not breaking any guidelines, and will have the bankruptcy discharged as quickly as feasible.

The bright side is that in Australia the arrangements for bankruptcy are actually quite generous: you could go bankrupt owing millions of dollars and after 3 years it’s all completed with no strings attached. Compared to nations like the United States, our insolvency laws are quite good.

I do not claim to know why that is, but a couple of hundred years ago debtors went to jail. These days I presume the government thinks that the earlier it can get you back on your feet working and paying tax obligations, the better. It makes much more sense than locking you up which costs the taxpayer anyway.

Going bankrupt will clear away the vast majority of your several debts, (including tax debts to the ATO) but always remember the few exceptions- the primary ones being Centrelink Debts, Court Fines like parking and speeding fines, HECS or Fee Help loans, and money to pay for a car accident if the car was not covered.

There is much more that could be said about this and Bankruptcy generally so when obtaining some advice, keep in mind that there are often alternatives when it includes Bankruptcy in Sydney, so do some groundwork, and good luck!

If you want to find out more about precisely what to do, where to turn and what questions to ask about Bankruptcy, then don’t hesitate to get in touch with Bankruptcy Experts Sydney on 1300 795 575, or visit our website: www.bankruptcyexpertssydney.com.au.