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Top 5 Tips on How to File For Bankruptcy in Australia

Many Australian’s have only truly considered bankruptcy when playing a game of Monopoly with their friends! In spite of this, there are roughly 13,000 people that declare bankruptcy every year in Australia. It’s astounding how rapidly individuals can go from experiencing a balanced financial position to tackling a mountain of debt. Most of the time, unfortunate events like loss of income, divorce, or unplanned medical expenditures will trigger serious financial problems within just a couple of months. Rather than wrestling with these debts for years and ignoring the elephant in the room, it’s far better to cut your losses and seek financial support as quickly as possible.

A short time ago, the Australian Government proposed changes to bankruptcy laws that reduce the bankruptcy period from three years to 1 year. If this proposed act is passed, it will have a remarkable impact on the stigma linked to bankruptcy and the financial repercussions that bankrupts will experience down the road. While lots of people understand the concept of bankruptcy, lots of folks wouldn’t know where to start if they decided that filing for bankruptcy is the best option for them. To offer some insight, here are the top 5 tips on how to file for bankruptcy in Australia.

  1. Seek guidance from a registered bankruptcy trustee

If you’ve decided that bankruptcy is the best approach for you, always consult with a registered bankruptcy trustee prior to making any concrete decisions. There is a vast difference between a firm that charges you to file for bankruptcy and a legitimately registered bankruptcy trustee firm. In most cases, bankruptcy firms are not the same as registered bankruptcy trustee firms, so be sure you get the right advice the first time so you can make the best financial decision. The right advice will not only aid you with your decision-making, but also put you in the best position to make a complete recovery after you have been discharged.

  1. Download the forms needed to file for bankruptcy

If you’ve decided that bankruptcy is the best choice for your individual scenario, there are two sets of documents that you will need to complete in order to declare bankruptcy:

  • The Debtor’s Petition, which is a 3 page document (visit this site to download: https://www.afsa.gov.au/insolvency/how-we-can-help/forms-list/debtors-petition).
  • The Statement of Affairs, which is a 25 page document (visit this site to download: https://www.afsa.gov.au/insolvency/how-we-can-help/forms-list/statement-affairs).
  1. Collect your supporting documents.

In almost all bankruptcy proceedings, individuals have to provide evidence that their claims are accurate by supplying a variety of supporting documents. Typically, this will include the following:.

  •  Income statements and personal tax returns
  •  Company tax returns (if you are a business owner)
  •  Centrelink benefits statement (if appropriate)
  •  Formal child support notices
  •  Any family law orders
  •  Any court orders
  •  Wills of any deceased estate of which you are the beneficiary
  •  All transaction statements from transferred assets over the last 5 years

It is paramount to note that failing to provide accurate information or any effort to conceal information that would otherwise be relevant to your bankruptcy case is a serious offence that is punishable in a criminal court.

  1. Complete the bankruptcy paperwork.

You must answer each and every question in your bankruptcy paperwork accurately and honestly to ensure it gets processed effectively. It is essential that you include the address details of all your creditors in the secured and unsecured sections of the bankruptcy paperwork. In the Debtor’s Petition, you’ll need to provide at the very least two types of ID. If you’re unsure of which forms of ID are acceptable, check the AFSA website (https://www.afsa.gov.au). If you run out of space when answering any questions, simply print out another copy of that page and use it to fill out extra details. Moreover, be careful to include all assets sold in the last 5 years in question 33.

  1. Submit your bankruptcy paperwork.

Before you lodge your bankruptcy paperwork, inspect the date to make sure you are lodging it within 28 days of you signing it. At Bankruptcy Experts Tamworth, we understand that all the paperwork can be a bit overwhelming, so if you have any questions regarding your any of your answers, it’s best to contact us on 1300 795 575 to ensure you get it right the first time. Alternatively, visit our website for additional information: www.bankruptcyexpertstamworth.com.au.

 

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Top 3 Causes of Personal Bankruptcy in Australia

Nobody likes to consider bankruptcy, which is understandable given that bankruptcy will disturb your financial circumstance for several years to follow. This may be one of the reasons why individuals don’t look for financial assistance in times of need, because they are under the typical misconception that bankruptcy is the only way to work out their financial concerns. Unfortunately, this isn’t the case as there are many choices available to those facing financial difficulties. What many people don’t know is the sooner they act, the more choices will be generally be available to them.

In Australia, personal bankruptcies are on the rise again, with the September 2017 quarter indicating an 8% growth in the amount of bankruptcies cases than the last year. In truth, the September 2017 quarter was the ninth consecutive quarter in which the number of debt agreements increased. Like me, you may be wondering why?

Well, the economy is doing fine with interest rates still at record lows and unemployment steady at 5.6% as of February 2018. Even though the unemployment figures aren’t ideal, it’s floating around average levels which surely wouldn’t cause an 8% increase in the number of personal bankruptcies. So, what exactly has caused 4,236 people to file for bankruptcy in the September 2017 quarter?

If you’re dealing with any financial hardship, understanding the top causes of personal bankruptcy will give you awareness into what aspects of your finances you need to prioritise. Our world is changing quickly and detecting new risks in your own financial circumstance will help you to proactively address them. To give you some insight, here are the top 3 causes of personal bankruptcy in Australia in 2017.

Excessive use of credit

The primary cause of bankruptcy in Australia today arises from excessive use of credit. This is exceptional, since it is the very first time since data collection started in 2007-08 that excessive use of credit has surpassed unemployment as the number one cause of personal bankruptcy.

Naturally, this is an ongoing issue that needs to be addressed. Banks charge extravagant fees and interest charges for late credit card repayments, so if you’re currently behind in your credit card repayments, act now. The Government’s MoneySmart website (https://www.moneysmart.gov.au) has lots of online resources that can help those with credit card troubles. Seeking financial guidance is highly advised to educate individuals how to plan and stick to a budget.

Unemployment

Unemployment or loss of income remains to be one of the most contributing aspects of personal bankruptcy. This comes as no surprise since many Australian’s don’t have income insurance or an emergency fund which they can use if they encounter an unanticipated termination or resignation. With unemployment rates currently at 5.6%, this leaves many Australians without a steady income source and depending only on Centrelink payments to continue to be solvent. The best way to deal with an unanticipated loss of income is to be prepared, which highlights the importance of putting together an emergency fund that can assist you and your family for three to six months.

Relationship breakdowns

The third biggest cause of personal bankruptcies in Australia stems from relationship breakdowns. Divorce rates are gradually increasing, with the ABS recording 46,604 divorces in 2016. Although divorces are not uncommon, financial problems caused by divorces are common given the affiliated legal costs, child support, and the abrupt transition into a one-income household. Many individuals end up inheriting debts from their partners or are not able to pay off existing credit because their expenditures have greatly increased.

Looking ahead

Irrespective of the reasons for your financial challenges, the fact remains that the sooner you seek financial assistance, the more prospects will generally be available to you to resolve these issues. Lots of individuals grapple with debt for years before seeking help. If you’re juggling your finances and avoiding phone calls, don’t wait any longer. Call the specialists at Bankruptcy Experts Tamworth on 1300 795 575, or alternatively visit our website for more information: www.bankruptcyexpertstamworth.com.au

 

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The Difference Between Good Debt and Bad Debt – What You Need To Know

For most Australian adults, debt is a part of our day-to-day lives. Regardless of whether you want to further your skills by obtaining a degree, purchase a home for your family, or buy a vehicle so your family has transport, securing a loan is very common simply because we don’t have enough money to pay for these expenditures upfront. It appears that everybody takes out a loan at one point or another, so what’s the problem?

The problem is that a lot of folks don’t recognise the difference between good debt and bad debt, and consequently, they take on too much bad debt which can lead to serious financial problems in the coming years. Not all loans are created equal, and generally you’ll discover an extensive difference between your credit card interest rates and your mortgage interest rates. As time go on, your credit report will have a vital effect on your borrowing capacity, so paying your bills on time and not defaulting on any loans is critical, as well as keeping a healthy balance between good debt and bad debt.

Each time you make an application for credit, your loan provider will examine your credit report to determine your financial history and then decide whether they’ll endorse your loan. Too much bad debt on your credit report will be viewed negatively by lending institutions, as it displays poor financial decisions and behaviours. To ensure that you maintain healthy financial practices, it’s essential that you are aware of the difference between good debt and bad debt.

What’s the difference?

The difference between good debt and bad debt is relatively straightforward. Good debt is frequently an investment that will increase in value over time and will assist you in constructing wealth or providing long-term income. However, bad debt generally decreases in value quickly and does not add any value to your wealth or produce a long-term return. To give you some idea, the following provides some examples of each of these types of debts.

Property

The price of land has traditionally increased in time, so acquiring a mortgage is considered a good debt because the value of your land will increase in time. Additionally, mortgages often have low interest rates and a long term, normally 20 to 30 years, which shows that the value of your land can double or triple during the life of your loan.

Stock Market

Obtaining a loan to invest in the stock market is also regarded as good debt because the returns on the stock market are traditionally favourable. Lending institutions typically view stock exchange loans as good debt because you are aiming to enhance your wealth over time through a firm investment. Be careful though, it’s not wise to invest in the stock exchange unless you have a sufficient amount of knowledge.

Education

Another type of good debt is investing in your education, whether it be university or a trade, given that it increases your skills and your potential to earn a higher income in the future. In Australia, the interest on HECS loans are equal to inflation which clearly makes them a very enticing option.

Credit cards

Credit cards are normally the worst type of debt a person can have. Credit card debts shows to loan providers that you have poor financial habits because the interest rates are incredibly high and you have nothing in value to show for your investment. Individuals with credit card debts frequently have issues in securing future credit from creditors.

Vehicles and consumer goods

Another kind of bad debt is loans for vehicles and other consumer goods. When you obtain a loan to buy a car, it instantly decreases in value when you drive it out of the dealership. The same applies to consumer goods like flat screen TVs, because you are basically paying interest for something that depreciates in value very rapidly.

Borrowing to repay debt

If you end up in a situation where you need to obtain a loan to repay existing debt, it’s best to seek financial advice as quickly as possible. This kind of borrowing will only produce further money problems, and the sooner you act, the more options will be available to you to resolve the issue. If you find yourself facing a mountain of debt, speak to the professionals at Bankruptcy Experts Tamworth on 1300 795 575, or alternatively visit our website for more information: www.bankruptcyexpertstamworth.com.au

 

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Best Ways to Improve a Bad Credit Report

Whether we understand it or not, our credit report has a considerable effect on our lives. It’s kind of like our health; we don’t cherish good health until we lose it. Many individuals don’t even realise they have a bad credit report until they apply for a personal line of credit and it’s rejected. It can come as quite a shock to some, given that even one overlooked payment that is documented by your financial institution can stay on your credit report for a maximum of seven years.

So, what is a credit report? A credit report is a document that specifies information about your financial history with creditors. In recent years, credit reports have been overhauled to place greater importance on constructive history such as paying your bills on time, but overwhelmingly, credit reports are used by creditors to gauge your ability to repay debts by assessing your past behaviour.

When lenders inspect your credit report, you commonly either get a pass or fail so any default irrespective of its severity can have a long-lasting effect on your financial prospects for years to follow. Although finding solutions to repair a poor credit report can be tricky, there are specific things you can do to enhance it. Fortunately, we’ve put together a list of recommendations that you can try to enhance your credit report and your overall financial health.

Examine your credit report for any errors

The first step is to review your credit report to learn exactly what it consists of. You can do this by paying a small fee to a firm like ‘Check My Credit File’ (https://www.mycreditfile.com.au). It’s not uncommon for oversights to be made on credit reports which can have a detrimental impact on your financial abilities. Read your credit report thoroughly and challenge any errors that you find to ensure your credit report accurately emulates your financial history. Some general errors that can occur are:

  •  Mistakes in personal details
  •  Wrongful defaults and judgements
  •  Old defaults and judgements
  •  Incorrect information regarding your credit history

If you find any errors, alert the credit reporting agency in writing so these listings can be altered or removed to emulate your true credit history.

Pay your bills on time

A lot of people underestimate how critical it is to pay your bills on time. Sometimes, individuals can be forgetful considering that they have too many bills to pay, so it’s a wise idea to speak with all your creditors and ask them to automatically debit your bank account each month. Often, your creditors would be more than happy to do this as delivering paper statements is time-consuming and costly. By placing all your bills on autopilot, you can be certain that they’ll be paid in full and on time, which will have a positive effect on your credit report

Add extra information to your credit report

There are specific details throughout your credit report which lenders will view favourably. As an example, if you are married, have been employed by the same company for over two years, or you are a homeowner, then this information will improve your credit report. Creditors typically view this information in a positive light and it can help you in future credit applications. If you discover that this sort of information is missing from your credit report, alert the credit reporting agency and request that it be provided.

Steer clear of too many credit applications

Every time you request a line of credit, it is mentioned on your credit report. Obviously, too many applications for credit will have a detrimental impact on your credit report and the way in which lenders view your financial behaviours. It is very important that you are sensible and selective when applying for credit and only apply when you are optimistic it will be accepted. At the same time, if you recently had a credit application turned down, wait a respectable amount of time before applying again.

Look at a debt consolidation loan

Naturally, it can be very tough to control your debts when then you have lots of them. Neglecting just one debt repayment can become a default, which will stay on your credit report for at least five years. Think about a single debt consolidation loan which will accumulate all your debts into one, single, monthly repayment. Usually, interest rates on debt consolidation loans are fairly low, and you’ll eliminate any further defaults which will have a positive impact on your credit report. If you’re interested in a debt consolidation loan, phone our friendly team at Bankruptcy Experts Tamworth on 1300 795 575, or alternatively visit our website for more information: www.bankruptcyexpertstamworth.com.au

 

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Personal Finance Tips – Finance Goals For Your 20’s.

There’s no question that your 20’s is a very cherished phase of your life. There’s a timid but exhilarating feeling about becoming an adult, leaving home, and being financially independent. Regardless of whether you began a career, a university degree, or spent time traveling the world and gaining life experience, your 20’s is a critical decade from both a personal and financial viewpoint. No matter what path you decide upon, the one constant that will always remain in your life is money.

The point of the matter is, the earlier you start saving money and building wealth, the better your financial condition will be in the future. Regardless of whether you plan to get married, start a family, or purchase a house, there are certain financial objectives that every individual in their 20’s should strive to accomplish so as to secure a better a future. In this post, we’ll be taking a closer look at these objectives and how you can begin developing healthy financial habits.

Set up a budget
Building healthy financial habits starts with understanding how to budget. Being able to spend less money than you earn is the key to saving money, so start taking control of your finances by forming a budget and following it! With a paper and pen, write down your monthly income and expenses. Examine your expenses to find out which can be reduced, or which can be cut out entirely. Some ways to lessen your expenditures are electing to eat at home rather than eating out and changing your Cable subscription to streaming services like Amazon instead.

Remove your debts
Whether you’ve travelled overseas or have student loan debts, the quicker you repay these debts, the better. Interest compounds with time, so paying off your debts by reducing expenses or working a second job could save you thousands of dollars in only a number of years. These savings can then be invested in a high-interest term deposit as an example, which will put you in a substantially better financial position than only making the minimal monthly repayments on your debts.

Build an emergency fund
Life almost never works out the way you planned, so it is very important to be prepared for any unanticipated changes that might be needed. You could find yourself out of work, or in an accident that hinders you from working, so having an emergency fund will be able to give you some breathing room when you need it the most. Financial experts propose that all folks should have a devoted emergency fund that is capable of supporting their living expenses for three to six months.

Be insured
Insurance protects you financially from any detrimental consequences, for instance income insurance should you lose your job, medical insurance for unanticipated medical expenses, and vehicle insurance in the event your car is stolen. Even though it’s not always recommended to get every kind of insurance available, it’s undoubtedly a wise idea to analyse your individual situation to see which is best suited to you. For instance, health insurance is highly recommended for everyone due to the inflated costs of uninsured medical treatment. Without insurance, an unplanned incident may result in considerable damage to your financial position.

Invest in a diversified portfolio
If you’ve been able to save a certain amount of money that is otherwise sitting idle in the bank, look into investing this money in a high-interest term deposit. After you’ve got more money saved, contemplate buying some property, or investing in gold. The key to a sound investment portfolio is ‘diversification’, meaning that you manage the risks of investment by putting your eggs in different baskets, so to say.

Get financial help immediately
If, for whatever reason, you’ve found yourself in financial trouble, the best advice is to seek financial assistance immediately. Lots of folks struggle with financial troubles for years before seeking help, which puts them in a worse position as their debts will only compound over time. The sooner you get financial guidance, the more options are available to you, so if you need any guidance with your financial situation, get in touch with the specialists at Bankruptcy Experts Tamworth on 1300 795 575, or visit our website for additional information: www.bankruptcyexpertstamworth.com.au

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Everything you will need to know about Bankruptcy Notices

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If you have been given a bankruptcy notice or court order you must act immediately to prevent future distress. Owing someone else money referred to here as a creditor, can be any person or business to whom you owe money. If you’re unfit to pay money to a creditor, the creditor will consult the Australian Financial Security Authority (AFSA) who will in turn deliver a bankruptcy notice requesting payment of that money.

Of course, there is a threshold to the quantity of money owing to creditors before they can speak with the AFSA, and the minimum amount is $5,000. Soon after the creditor has gotten hold of a final judgment, AFSA will issue you with a bankruptcy notice.

It’s extremely important that you take timely action if you receive a bankruptcy notice from the AFSA. You will commit an ‘act of bankruptcy’ if you do not do any of the following:

  • Abide by the bankruptcy notice inside the requested timeframe mentioned on the notice (normally 21 days); or
  • Apply to the courts to ask for the bankruptcy notice be cancelled or set aside inside the timeframe reported on the notice (normally 21 days).

Committing an act of bankruptcy indicates that you give your creditor permission to apply to the Federal Circuit Court for a sequestration order, or simply put, an order that will make you legally bankrupt.

How does a Bankruptcy Notice get served to me?

A bankruptcy notice could be served to you in a couple of ways; it may be validly served to you in person, by ordinary post, or hand delivered to your registered address. In several circumstances, a bankruptcy notice may be served in an electronic form, either through email or fax.

If it’s not attainable for a creditor to serve a bankruptcy notice using any of these means, a court order may be acquired which makes it possible for creditors to serve the bankruptcy notice in a different way.

I have a bankruptcy notice, now what?

To abide by a bankruptcy notice, you must do one of three things:

  1. You must pay in full the amount stipulated in the bankruptcy notice; or
  2. Set up an agreement with the creditor, such as a payment plan over a defined time period. The creditor must accept the payment arrangements terms and conditions. It’s always advised that the agreement is made in writing so you have documentation of the agreement.
  3. Get some insolvency advice. At this point, you must not delay and get some assistance. If you have a notice of bankruptcy, just give us a call here at Bankruptcy Experts Tamworth on 1300 795 575 for a Free Consultation.

It is necessary to note that all of these actions must be taken within the timeframe stipulated in the bankruptcy notice (usually 21 days from the date of the notice).

Can I get my Bankruptcy Set Aside?

If warranted, you can apply to the court to have the bankruptcy notice cancelled or set aside. This should not be taken lightly though, given that if there are inadequate grounds to make an application then you will be liable to pay all the creditors legal costs which only increases the debt you owe to them.

If you do apply for your bankruptcy notice to be set aside, it’s always a good idea to request that the court extends the timeframe for compliance with the bankruptcy notice, so you keep away from committing an act of bankruptcy while the court processes your application. In short, don’t leave it to the eleventh hour.

To have your bankruptcy notice set aside, one of the following conditions must apply:

  1. The debt claimed on the bankruptcy notice does not exist;
  2. There is a defect in the bankruptcy notice;
  3. You have grounds for a counter-claim, cross demand, or set-off, equal to or exceeding the sum of debt issued in the bankruptcy notice; or
  4. The bankruptcy notice is an abuse of process.

What if the debt claimed on the bankruptcy notice does not exist?

To establish that the debt claimed on your bankruptcy notice does not exist, you will need to provide evidence that:

  • You have in fact paid the creditor the amount owing under the order or judgement; or
  • You have appealed the order by commencing proceedings to set aside the order or judgement.

In your application to set aside the bankruptcy notice, you can not simply say that you have a persuasive argument to do so. You must have already submitted the applicable documents with the court that handed down the order. Further, you must have the ability to provide evidence to the Federal Circuit Court that reveals that you have a genuine case for grounds of appeal.

On top of that, if you do not initiate the process of setting aside the judgement or order prior to filing your application to set aside the bankruptcy notice, the Federal Circuit Court will not have the ability to extend the timeframe for compliance under sections 41( 6A) and 41( 6C) of the Act. For that reason, you will have committed an act of bankruptcy.

What is a Defective Bankruptcy Notice?

A defect in the form or content of the bankruptcy notice happens when the creditor has failed to obey the requirements of the Act, in which case you might have grounds to apply for the bankruptcy notice to be set aside. Some defects are more severe than others, and not all defects will make a bankruptcy notice void as these defects can be mended at the discretion of the court under s 306( 1) of the Act.

In general, the defect must be serious or inflict confusion over the actions you must take to abide by the bankruptcy notice for you to have the capacity to set aside the bankruptcy notice.

There are some fundamental requirements of a bankruptcy notice and if these requirements aren’t met, the bankruptcy notice will consequently be invalid. The following details some examples where these essential requirements have not been met:

  • The creditor’s address on the bankruptcy notice must make it reasonably practicable for the debtor to make payment (e.g. PO Boxes may not be suitable);
  • The creditor’s and debtor’s name on the bankruptcy notice must match the creditor’s and debtor’s name in the order or judgement;
  • Attached to the bankruptcy notice must be a copy of the judgement or order;
  • It is a requirement that there is a timeframe for compliance included in the bankruptcy notice;
  • If the creditor is claiming interest on the debt owed to them, the calculations must be detailed in a separate document attached to the notice; and.
  • If any part-payments made by the debtor, or any other allowed reductions, the total amount of these deductions must be specified in a separate document attached to the notice.

 

The following specifies some scenarios where bankruptcy notice defects have not been serious enough to make them invalid:

  • Failure to include the ACN of the company who is the creditor; and.
  • The creditor’s address is listed as the address of their solicitors (assuming payment can be reasonably made to this address).

There are several other legal requirements that should be born in mind. These include:

  • The order or judgement must be at least $5,000, not including any post judgement interest being claimed by the creditor;
  • A bankruptcy notice can still be issued if the total amount is lower than $5,000, provided that the total amount was greater than $5,000 when the order or judgements were pronounced;
  • A bankruptcy notice must be based on a final judgement or order that is currently owing to a creditor under s 40( 3) of the Act. A final judgement is defined as a judgement which finally disposes of the rights of the parties involved;
  • A bankruptcy notice must be served with six months of its issue. The only exception is if the Official Receiver (reg 4.02 A) has increased this timeframe;
  • The final order or judgement must not be stayed both at the time of issue of the notice and the time of its service. If a stay of execution is granted after service, it has no bearing on the bankruptcy notice;
  • An overstatement of the amount claimed to be owed to a creditor does not annul a bankruptcy notice, except if the debtor contests the credibility of the notice inside the timeframe for compliance (s 41( 5)); and.
  • The order or judgment on which the bankruptcy notice is based can not be more than 6 years old (s 41( 3)( c)).

Under what grounds could I counter-claim, set-off or cross demand?

To be successful using the grounds of counter-claim, set-off or cross demand, you will need to properly demonstrate to the court the following two items:

  1. The counter-claim, set-off or cross demand is equal to or more than the total amount claimed by the creditor in the bankruptcy notice. You must also satisfy the court that these claims are legitimate and have a reasonable likelihood of succeeding; and.
  2. The counter-claim, set-off or cross demand was not set up in the proceeding where the creditor attained the judgement on which the bankruptcy notice is based on. Failure to capitalise on the opportunity to counter-claim, including any adversarial personal circumstances (including lack of evidence or legal counsel), will not be adequate.

What is an Abuse of process?

An abuse of process materialises if you can substantiate that the reasons behind the bankruptcy notice is to pressure you to pay a debt, instead of a legitimate effort by the creditor to invoke the court’s jurisdiction in regard to insolvency. If the former is true, then you will have the option to set aside the bankruptcy notice caused by an abuse of process. To be successful using these grounds, you will need to supply evidence of collateral purpose or excessive pressure.

What If I believe I have grounds to act on one of these items above?

If you feel that you have a case for one of the previously mentioned reasons to contest your bankruptcy, you will need to get the following documents prepared, filed, and served for you to apply for your bankruptcy notice to be set aside:

  1. Application (Form B2); and.
  2. Affidavit.

Application.

You can locate the requirements for an application to set aside a bankruptcy notice in rule 3.02 of the Rules. You can either obtain a final order or an interim order.

Final orders have to describe the ideal result you aspire to receive and the legislative basis which the court can approve this decision. An example of a final order might be: “That bankruptcy notice (BN00231) issued on 15 June 2017, which was served to me on 1 July 2017, be set aside under section 30( 1) of the Bankruptcy Act 1966.” You would also have to present a copy of the bankruptcy notice with your application.

Alternatively, an interim order needs to outline any outcomes you wish before the application is finally decided upon, and the legislative basis which the court can grant this decision. An example of an interim order could be: “The time for compliance with bankruptcy notice (BN00233) be lengthened up to and including 7 days after the outcome of this application by the Court under section 41( 6A) of the Bankruptcy Act 1966.”.

Affidavit.

If you intend to make an application, it must be accompanied by an affidavit which cites the grounds of your application as well as the date the bankruptcy notice was served to you. If you’ve already made an application to set aside the judgement of the bankruptcy notice, a copy of this application/s also needs to be attached. It’s essential that your affidavit must fulfill rule 3.02 of the Rules, otherwise your application may be refused and your request for an extension of time to follow the bankruptcy notice may not be granted.

Filing your application.

When your documents are finalised, they will need to be filed with the courts either online or personally at the Federal Circuit Court Registry.

There is a lodging fee that will need to be paid, however in some situations you can apply for a waiver of this fee.

Serving your documents.

Once you’ve lodged your application and affidavit and they have been stamped, you must personally serve these documents to the creditor within three days after the documents have been lodged.

If you are an individual, you must personally take the documents to the person identified on the document and give it to them. If they decide not to receive the documents, the person serving them may place the document in the presence of the person to be served and verbally instruct the individual what the documents consist of.

If you are an organisation, you must personally go to a registered office of the company and hand the documents to a person servicing that organisation. You don’t need to present the documents to the company’s principal address, the Australian Securities and Investment Commission (ASIC) will provide you with a list of that organisations registered addresses.

If you would prefer somebody else to serve the documents, you can get a bailiff of the court or a process server to serve the documents for a fee.

Financial Advice.

If you’re not sure whether you have grounds to set aside the bankruptcy notice, or you’re unsure whether you should spend the time and money to apply because of financial reasons, speak to Bankruptcy Experts Tamworth on 1300 795 575 for free advice. Alternatively, you can visit our website for more information: www.bankruptcyexpertstamworth.com.au

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Australia’s Household Debt Crisis Looms

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Today in the news, former economics advisor John Adams proposed that Australia is too late to stop an ‘economic apocalypse’ regardless of his repeated warnings to the political elites in Canberra. He continued to urge the Reserve Bank to raise interest rates to stop household debt getting further out of hand.

This bubble is easy to explain. Confidence! It’s the fallacious perception that Australia’s last twenty years of continued economic growth will never encounter any type of correction is most distressing. Australia survived the GFC and a mining boom and bust. In the meantime, Melbourne and Sydney house prices have not missed a beat or taken a backward step. Sadly, the decision makers and powerful elite in Australia are from these two cities, and see Australia’s economic hurdles through a totally different lens to the rest of the country. It’s a two-speed economy spiralling out of control.

I acknowledge that this looming crisis isn’t just as simple as house prices in our two biggest cities, but the average house prices in these cities are ever rising and contribute significantly to overall household debt. The authorities in Canberra realise there’s an overpriced house market but appear to be reviled to take on any genuine actions to correct it for fear of a property crash.

As far as the rest of the country goes, they have a totally different set of economic prerogatives. For Western Australia and Queensland specifically, the mining bust has sent house prices tumbling downwards for years now.

Among one of the warning signs that demonstrate the household debt crisis we are beginning to see is the increase in the bankruptcy numbers across the entire country, particularly in the 2017 March quarter.

(source: https://www.afsa.gov.au/about-us/newsroom/media-release-regional-personal-insolvency-statistics-march-quarter-2017).

In the insolvency sector, our firm are noticing the damaging effects of house prices going backwards. While it is not the leading cause of personal bankruptcies, it definitely is a decisive factor.

House prices going backwards is just part of the issue; the other thing is owning a home in Australia enables lenders to put you in a very different space as far as borrowing capacity. Simply put, you can borrow far more if you are a home owner than if you are not a home owner. I bankrupt people everyday and the level of debt varies considerably from the non-home owner to the home owner. Lending is hinged on algorithms and risk, so I suppose if you own a home you’re more likely to have consistent income and less likely to end up bankrupt, so subsequently you can borrow more. If you own a home in Sydney and Melbourne, you’re a safer risk than if you own a home in Mackay, simply due to the fact that in one area the median house prices are booming and the other is going backwards, as it’s been doing so for years.

In conclusion, it seems we are running into a wall at full speed, and there are very few people suggesting we slow down. If you would like to know more about the looming household debt crisis then phone us here at Bankruptcy Experts Tamworth on 1300 795 575 or visit our website for more information: www.bankruptcyexpertstamworth.com.au

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ATO Debts Becoming Uncontrollable? Caution to all ABN holders, your ATO Debts may now harm your credit rating. Beware of ATO Bankruptcy!

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There is terrible news for business owners who have an ATO debt as of 1st July 2017. Small businesses need to be careful of ATO Bankruptcy since the ATO may unveil information of your tax debts to credit reporting agencies like Veda Advantage and Dun & Bradstreet. This will make it far more difficult for small businesses to attain credit, potentially crippling them. How could this bear upon you? You may be affected if you fit into one of the following 3 categories:

  1. Have an ABN (i.e. you own a business and/or you are a contractor);.
  2. Have debts with the ATO that are greater than $10,000 and are more than 90 days overdue; and.
  3. You are not in any type of payment arrangement with the ATO.

Just so you’re aware, the ATO must first give notice to you before they impart your debt information to any credit agency.

If your ATO debts seem to become unmanageable and you don’t want your credit rating impaired then you have at least one feasible option: Set up a payment arrangement with the ATO. This may prevent you from ATO Bankruptcy.

Conversely, if you feel there is simply no hope or the ATO is threatening legal action against you due to your unpaid ATO debts, then bankruptcy may be a feasible option for you. If you want to know more about how you can get out from under the debilitating burden of business or personal debts, just give us a ring here at Bankruptcy Experts Tamworth on 1300 795 575 or visit our website for additional information: www.bankruptcyexpertstamworth.com.au.

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What Remains on Your Credit Report And For How Long?

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A credit report is a specific document that records your history with creditors and has a substantial effect on your future financial abilities. Having a ‘good’ credit report is regular as long as you pay your bills and debt repayments punctually. Having said that, overlooking a repayment on a bill or debt repayment can cause significant issues if you intend to acquire credit again in the future. In recent years, the rules have been remodelled to place a greater significance on favourable history such as paying your bills on schedule, but overwhelmingly, credit reports are utilised as a means for lenders to evaluate your capabilities to repay a loan by checking for any financial oversights you’ve made before. If you have made some financial errors, how long does this information remain on your credit report? What kinds of financial mistakes are more drastic than others? This blog will investigate these questions to give you a better understanding of how these documents work.

What Do Credit Reports Consist of

The following will list the type of information that is commonly found on your credit report:

Personal Information including your name, address, DOB and driver’s licence details

Joint applicant details if you’ve received credit jointly with another individual

Credit card information

Arrears brought up to date, for example, any overdue or unpaid debts that have since been settled

Defaults and other infringements for example missed minimum credit card repayments and loan repayments which are more than 60 days overdue

All credit applications

Debt agreements like bankruptcy, personal insolvency, and court judgements

Repayment history which is perhaps the most critical aspect of your credit report. It covers all credit accounts such as home loans, car loans, personal loans and credit card loans. Any missed repayments will contain information such as the due date, paid date, amount, and any part payments if applicable

Commercial credit applications such as any business or commercial loan applications

Report requests which lists all the lending institutions who have previously requested a copy of your credit report1

Credit Report Defaults

Defaults with creditors will be listed on your credit report and will impair your capacity to secure credit in the future, so it’s critical to recognise what constitutes a default on your credit report. If you cannot make a repayment on a debt, your lending institution has the capability to report your debt to a credit reporting agency who will then note this information on your credit report. However, lenders can only do this if the following conditions apply:

The default amount is $150 or more;

You’re a ‘confirmed missing debtor’ or ‘clearout’ which signifies the lender cannot contact you because you have changed your phone number and address;

The debt is equal to or more than 60 days overdue; and

The lender has asked you to pay the debt by either sending you written notice in the mail, or by asking you over the phone1

Your loan provider must inform you of any intents in lodging a report prior to doing this. Usually, your contract or service agreement will describe when a default can be made and reported to a credit reporting agency.

How Long Does A Default Remain On My Credit Report

Most of the time, a credit default will stay on your credit report for five years, but if a lending institution cannot contact you because you’ve changed your contact number and address (referred to as ‘clearout’), the consequences are more extreme and the default will continue to be on your credit report for seven years. It is necessary to keep in mind that even when you do repay an overdue debt, the default will nevertheless stay on your credit report, however the status will be updated to reflect that the debt has been settled. Every time you make an application for a loan, the loan provider will always inspect your credit report first and if there are any defaults, the financial institution can reject such loan applications. If this is the case, the lender must notify you that your application has been rejected based on your bad credit report.

As you can see, credit reports are serious documents that can significantly impact your borrowing capacity and financial flexibility. The majority of the time, credit reports are either a pass or a fail, so any default, despite how big or small, will be shown on your credit report for five years. Although there are measures to improve your credit rating (like paying your bills on schedule), creditors are really only interested in any defaults on your credit report and can reject a loan application based on a single default. If anything, this article highlights the importance of paying your bills and debt repayments on time, so if you end up with any financial difficulties and can’t pay your bills by their due date, reach out to Bankruptcy Experts Tamworth on 1300 795 575 for assistance, or visit their website for more information: www.bankruptcyexpertstamworth.com.au

 

Sources:

https://www.moneysmart.gov.au/borrowing-and-credit/borrowing-basics/credit-reports

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What Is It Like To Go Bankrupt?

Bankruptcy Experts Tamworth, Bankruptcy Tamworth,Bankrupt Tamworth,Insolvency TamworthThere’s no question that bankruptcy isn’t the ideal scenario to be confronting. There are some unpleasant financial penalties involved and it’s a very tough and stressful process that will affect you financially for years to come. Finding yourself in mountains of debt can materialise very quickly, and lots of individuals end up in this situation due to a wide range of factors. Not having the capacity to work resulting from illness is one of the most common reasons people declare bankruptcy. It’s not like they had any control over the situation, but being unable to pay off their debts because they have no income is the hard reality they have to face. Actually, 7,900 individuals in Australia declared bankruptcy in the March 2017 quarter1, so it’s not as rare as some people may think. If you ask me, I think that bankruptcy is neither good nor bad. Without a doubt, those who declare bankruptcy have made some poor financial decisions and will reprimanded accordingly, nevertheless filing for bankruptcy is also the first step to financial freedom. Lots of people struggle for years just to make ends meet, while their debts keep worsening, so in many cases, bankruptcy is an opportunity for a new beginning for individuals that are unable to repay their debts.

Though I’ve never been bankrupt personally, I’ve witnessed the journey of many people who have and surprisingly, most people are better off and glad they went through the process. If you’re facing financial distress and considering bankruptcy, this article will summarise what life is like after you declare bankruptcy.

You Will Not Be Completely Debt Free By Filing For Bankruptcy

Bankruptcy is quite complicated, and there is a standard misconception that all debts are eliminated by filing for bankruptcy. This is certainly not the case. There are a range of debts that won’t be removed, for example Centrelink debts, HECS debts, child support, court imposed fines (like speeding tickets), as well as money that is owed to an insurance company arising from a car accident where you were uninsured and liable. Conversely, filing for bankruptcy will clear debts like credit cards, GST and tax, and unsecured personal loans. The reality is, you will still have debts to pay after you declare bankruptcy, but the most critical debts in many cases, such as credit cards, will be eliminated.

Feelings Of Regret And Shame Are Normal

Bankruptcy is an arduous process and lots of people who declare bankruptcy have feelings of guilt and shame; as if they’ve lost in life. This is quite regular, however it’s imperative to overcome these emotions because the truth is, humans make mistakes, and bankruptcy is a way that you can make a fresh start financially and get your life back on track. The sooner you recover from these feelings of guilt, the sooner you’ll be able to start the recovery process and create a plan of how you’re going to repay your remaining debts and rebuild your credit rating. Bear in mind, bankruptcy lasts for three years and after seven years, it will no longer appear on your credit report, so it’s certainly not the end of the world.

You Can’t Borrow Any Money For Three Years

Unfortunately, by declaring bankruptcy you won’t be able to borrow any money under any circumstances for three years. During this time, it’s critical that you start rebuilding your credit rating by maintaining a regular income and paying your bills and outstanding debts on time. It’s simple but effective. After this three-year process, you become a discharged bankrupt and will have the opportunity to attain loans for secured assets like houses and cars, but your interest rates will be much higher because of your bad credit report. Although it’s not always sensible to obtain loans straight away, it is possible. After seven years from the time you became bankrupt, your credit report will be clean, and you will have the option to secure all types of loans again at competitive rates.

Life after declaring bankruptcy certainly isn’t easy, but the emotional relief that most individuals experience after starting the process definitely softens the blow. There are some serious financial repercussions involved, but declaring bankruptcy is the first step towards financial freedom and securing a bright future for you and your family. If you’re confronting financial distress, it’s always best to seek professional advice sooner rather than later. Whatever you do, don’t keep battling financially for years because you’re afraid of the stigma connected with bankruptcy. It’s challenging, but it’s also not the end of the world. If you ‘d like to talk with someone about your financial situation, contact Bankruptcy Experts Tamworth on 1300 795 575 for a confidential discussion, or alternatively visit their website for more details: www.bankruptcyexpertstamworth.com.au

 

Sources:

https://www.afsa.gov.au/statistics/personal-insolvency-statistics-0