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Bankruptcy in Canberra – Voluntary or involuntary bankruptcy?

When it concerns Bankruptcy, there are 2 sorts of individuals– those who have decided to declare bankruptcy and those declared insolvent by others (Their creditors).

When it comes to Bankruptcy in Canberra, normally people aren’t aware that there could be both voluntary, and involuntary insolvency– and this is crucial because in some cases people don’t realise that others can declare them bankrupt– and that if this occurs you have particular rights and’ obligations attached.

Involuntary bankruptcy:

Involuntary bankruptcy occurs when a person you owe money to involves the court to declare you insolvent. This will result in you being given with a notice that, usually when you get one of these sorts of notices, you have 21 days to pay all the financial debt. If you do not, then the lender goes back to the court and asks the court to supply a sequestration order that proclaims you insolvent. Throughout this time you will have a brief window in which you can dispute and put your case forward as to the reason that it really should not proceed to the next degree and why you ought to not be declared bankrupt. Once the decision has been made, you will be bankrupt and going through the same measures as people who took that path freely.

However, when it concerns Bankruptcy you can picture that the involuntary process is full of far more stress, worry and concern as other people are taking control of your entire life. My biggest idea with Bankruptcy and involuntary bankruptcy is that if you think that it could take place, get qualified guidance on bankruptcy as quickly as possible, even if you are just stressed over financial debt and fear that it could continue to escalate. I am sure that you can picture that it is much better to know what you can and can’t do before being forced into that circumstance. The moment you are insolvent, it’s ordinarily far too late to take steps.

What next?

Well if you have been declared bankrupt, you won’t really have many choices but to move through the process and you will certainly want to get professional advice to make sure you are declaring correctly, not breaking any guidelines, and will have the bankruptcy discharged as early as possible.

Fortunately is that in Australia the arrangements for bankruptcy are effectively very generous: you can easily 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 don’t claim to understand why that is, but a couple of hundred years ago debtors went to jail. These days I suppose the government thinks that the sooner it can get you back on your feet working and paying tax obligations, the better. It makes more sense than locking you up which costs the taxpayer anyway.

Insolvency will clear away the huge bulk of your several financial obligations, (including tax debts to the ATO) but keep in mind the few exemptions- 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 insured.

There is a lot more that might be said about this and Bankruptcy as a whole so if obtaining some recommendations, bear in mind that there are always choices when it involves Bankruptcy in Canberra, so do some research, and good luck!

If you wish to find out more about exactly what to do, where to turn and what inquiries to ask about Bankruptcy, then don’t hold off to get in touch with Bankruptcy Experts Canberra on 1300 795 575, or visit our website: