Declearing Bankruptcy – FAQ

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Can I travel offshore?

Yes. All you will want to do is apply to your bankruptcy trustee for permission to go. You’ll get it, but there is a one-page form you have to fill in simply to inform the trustee of how long you will be taking a trip, etc. This requirement is really only there so high rollers don’t skip the country. In some cases the trustee will request your passport, but don’t stress about it because you can request it back when you want to take a trip. Call us if you wish to know more about travel on 1300 795 575.

Can I keep my property?

Oftentimes the answer is yes! In fact, in most cases nowadays we can help you keep your home. At Bankruptcy Experts we are professionals at guiding people keep their homes. It’s actually very complex, so if you are concerned about losing your home call us on 1300 795 575 and we will walk you through your choices.

The consideration of losing the family house is probably the greatest obstacle to people declaring bankruptcy. We consult with people day after day who have battled for years under tremendous financial tension so they don’t lose their home.

So how is it possible to be bankrupt and keep your home? Easy, really; it’s a matter of equity. Let’s put it this way, if you have a house that’s worth $350,000 and you owe the bank $350,000 you effectively have no equity in the house, correct? The trustee will only sell your home if there is enough equity in the home if sold to pay back some of your debts. So in this particular instance, the trustee will then offer you some options, one of which is to simply to continue paying the mortgage and stay in the house while you are bankrupt.

So how can I determine the value of my house? A simple way is to go onto au and check out the sold houses tab in the Wollongong area and it will show you all the recent sales in your location. Another option, if you are not sure or are very concerned, is to have a registered valuer do a valuation on your home, not a real estate agent (unless they are registered valuers, naturally). Be cautioned this will cost you somewhere between $300-700. Just one more aspect of house values. If the trustee wants to sell your house they do so reasonably quickly. It’s not a 6-month slick advertising campaign and instead it’s generally by auction and they just meet the market on the day and that’s it. So when considering the value remember it’s a sell now price, not when the market improves.

Once you have figured out the resale value of your house the next thing to assess is ownership.

Generally most home loans are between 2 people as joint tenants who both contribute to the mortgage. If only one party is going bankrupt then the equity is calculated like this.

Say your home is worth $400,000 and the current price is $350,000. Then the balance of equity in the home is $50,000, right? Half of that total equity is automatically earmarked to the party not going bankrupt, leaving $25,000 for the bankrupt. Out of that $25,000 the bankrupt party has to pay for all of the selling costs including promotions etc., which, according to where you live, can cost anywhere between $12,000-20,000. In this particular case say the selling fees are going to be $15,000 then the balance left over after the sale is $10,000. So in this case the trustee will give the non-bankrupt party a variety of options. One of which is popular is for the bank to say, “Pay us the $10,000 and we won’t sell the home and you will have it removed as an asset from the bankrupt’s estate.” Or, simply put, negotiate to pay the $10,000 and you can keep the house.

Just a side note: the bank who has given you the property loan will need the repayments to be maintained obviously. No matter what the trustee decides, if you don’t pay the bank the loan they will eventually ask you to move out. So, put simply, keeping your house naturally implies keeping the mortgage as well.

There are plenty more options with your home, and we have just detailed one option of potentially 20 options you can select from, when it pertains to your house. We understand you have to get this correct. Gambling with the family home can be a devastating business. If you intend to get the correct advice or you just need to talk to someone phone us on 1300 795 575.

When would my travel be hampered?

Your travel would be prohibited by the trustee as a result of adverse legal action. For example, if your bankruptcy is a part of a criminal investigation or fraudulent activities, it’s possible the trustee will restrict your travel.

What happens to my credit rating?

Bankruptcy lasts 3 years and will sit on your credit record for that time. However, as with any default it will appear on your credit report for 7 years. You can have it removed if you get your bankruptcy annulled.

Will I ever have the capacity to borrow money again once I’m bankrupt?

Bankruptcy is for 3 years, and in that time you will not get a loan. After the 3 years is elapsed you will be able to get loans; you just won’t get the very best rate. Your credit report will be wiped clean 4 years after you have been discharged as a bankrupt then you will have a perfect credit history again and you will get the most competitive deal on loans.

Will I lose my car if I go bankrupt?

Generally no. Bankrupts hardly ever lose their cars because they’ve filed for bankruptcy. Naturally, this is conditional and we can let you know if yours is safe. Contact Bankruptcy Experts Wollongong on 1300 795 575.

There is a threshold or amount of wholesale value your car could be worth while you are bankrupt, which is $7,350. You will find all kinds of erroneous information about this on the web, but here are the facts. That $7,350 represents not the total value; it represents equity. So, simply put, if you have a car worth $35,000 you are repaying or leasing and the amount you could sell it for is $30,000 then you can keep your car because its equity is only $5,000. The company that lent you the loan for the car will be pleased for you to keep the car even though you are bankrupt as long as you keep up the payments.

What happens to my Centrelink debts if I go bankrupt?

As a general rule we have always told our potential clients not to count on having your Centrelink debt written off when you declare bankruptcy, however it seems more and more this is not the case.

In most cases it has been our experience that Centrelink will not pursue you for your Centrelink debts*(which is also outlined on the Centrelink website – see link below) for the three years you are bankrupt which is good news for those struggling week to week and need to file for bankruptcy to get some financial relief. What seems to be happening more and more lately is that they (Centrelink) may now just simply write the debt off at the end of the three years also. We had a client just the other day send us a Centrelink letter (See below) stating that not only that they wont pursue the debt for the 3 years of bankruptcy but also that they wont chase you for the debt after you have been discharged. In other words you wont ever have to pay back your Centrelink debt if you file for bankruptcy.

What if I’m behind on my car payments and I go bankrupt; will they take my car?

Get some advice on this one. If you need some advice today just call 1300 795 575. Basically, you will get about 2 to 3 payments grace when it comes to car loans. The bottom line is simple: whether you are bankrupt or otherwise, if you miss 3 or more repayments on your car loan the lender will repossess the car. Don’t assume because you are filing for bankruptcy you are automatically going to lose your car because in most cases we help people keep them.

When are the creditors notified of my bankruptcy?

The creditors, or individuals you owe money to, are informed in writing at about the same time you receive your bankruptcy file number.

Will anyone come to my home?

No. The bankruptcy procedure is ultimately a paperwork exercise. The only thing that actually occurs is you will either be written to or emailed a letter informing you that you are bankrupt. At Bankruptcy Experts Wollongong we make sure that this entire procedure is that straightforward, so if you have questions about this call 1300 795 575.

Can I have my bankruptcy annulled?

Yes. This process will take about 2 weeks and will absolutely remove the bankruptcy from your credit history. There are provisions within the Bankruptcy Act that enable a bankrupt person to have their bankruptcy annulled through a Section 73 proposal.

The consequences of creditor’s claims can often result in bankruptcy, regardless of whether or not it was the individual’s preference to enter bankruptcy, or if it was filed by a creditor. Nevertheless, bankruptcy is far from the end of the world for the person who undergoes bankruptcy.

We have been guiding people in the Wollongong area for years so contact us today on 1300 795 575 to get some assistance on this matter. We work out the best possible procedure for you to get back up and running, eliminating residual effects and obstacles of past financial circumstances to give you the best possible outcome. Having experience and skills specialising in Section 73 proposals, we can combine this with our proven strategies and methods to bring you through bankruptcy unharmed, ready to start over.

Can I get my bankruptcy annulled?

To start with, having your bankruptcy annulled is ultimately reversing it 100 %. So if you are imagining you would like to have your bankruptcy annulled there are a few things you need to know.

Firstly, how does the annulment actually work? A simple way to think of it it is let’s say somebody owes you $50,000 and they haven’t paid you one cent back for years. Then to make things worse you find out that they have filed for bankruptcy. You would kiss that cash goodbye, right? Years go by and they come to you with an offer to pay you $5,000 that their grandma is giving to them to settle your debt with them. Obviously you are happy to take it, because it is better than nothing. The only condition they ask for in return is that you agree to have the bankruptcy cleaned from their record, and if you don’t agree to do that then there will be no $5,000. Naturally you don’t care about their credit file; you are just grateful they are offering you some cash after all these years.

In bankruptcy terms this technique is typically described as a Section 73 proposal, and it’s an approach where “everybody wins.”.

Ultimately the trustee contacts your creditors, presents your offer, which is substantially less than the original amount owed, on the condition they wipe your credit file clean.

This technique takes a few weeks. The proposal can be done at any time in the 3 years you are bankrupt. However, you need to consider the timing of your proposal. Because it does cost money to do this, you need to make sure the odds are on your side. For example, if you are repaying money to the trustee each week because you earn over the threshold amount, then your creditors will know they are going to receive a certain amount from you over the 3 years anyway so it better be more than that will add up to.

If you have only been bankrupt 3 weeks it will be more difficult to get an annulment because they could get some funds from you over the 3 years if you earn over the threshold amount of money.

If you want help to put a section 73 proposal to your trustee or just desire more information about the timing of when to put an offer forward, just give us a call on 1300 795 575.

Can I file for bankruptcy if I’m already in a Debt Agreement or Personal Insolvency Agreement or in a Debt Consolidation Loan Contract?

Yes! We can aid you cancel all of these arrangements. With Debt Agreements and Personal Insolvency Agreements we have to have you released from them first before you declare bankruptcy, but it’s not a problem. If you are locked into one of these and simply can’t climb on top give us call at 1300 795 575.

What debts won’t bankruptcy erase?

There are very few debts that bankruptcy won’t 100 % erase, like Centrelink, child support, HECS and a court-imposed fine (speeding fines, etc.) and, finally, money owed to an insurance company as a result of a car accident in an uninsured car that you were driving.

Aside from that, it will eliminate debts like your credit cards, store cards, GST and tax, unsecured personal loans, etc. In reality, there are way too many things to list so if you have a particular debt you are worried about just ask for a free consultation 1300 795 575.

Is there a limit to the amount of debt I can go bankrupt for?

You can’t file for bankruptcy for an amount below $5,000; however, there is no limit above that. If you owe a couple million dollars, that’s handled no differently than $20,000.

What is the difference between a secured and unsecured loan?

An unsecured creditor is a creditor who does not have a security the chattels/assets/property purchased with the credit given to you. Such debts include credit card debts.

A secured creditor has a hold over the chattels/assets/property until the debt is paid out in full. If a debtor defaults on a secured debt, the creditor has the right to repossess and sell the chattels/assets/property to pay down the debt.

How can I make certain that you will succeed in making me bankrupt?

We have helped thousands of people declare bankruptcy over the years and we have never had anyone’s application rejected. That’s why we offer a 100 % money back guarantee.

Suppose I’m not completely sure who I owe money to?

There is a simple approach we use here, and all you need to do is get a copy of your credit history as it will have your credit history on there. Companies like will have the ability to get you a copy for a small fee.

I’ve had a car accident. Will the debt be covered in bankruptcy?

Car accidents may be difficult, so to keep it simple call us on 1300 795 575 to get the right advice on your situation. However, as a general rule, if you were driving a vehicle that was not insured then the cost of the repairs is not wiped out with bankruptcy. Having said that, it depends who admitted liability or who was at fault. If you go to court and the court demonstrates you were not at fault then you should be good.

Can I have business debts erased with my bankruptcy also?

Yes! We can help you accomplish this, although it’s possible there are effects and a number of regulations around this procedure, so call us and we will assist you through the process on 1300 795 575. Bankruptcy Experts Wollongong are specialists at helping businesses get back on their feet.

Can I pay out my bankruptcy debt and have it annulled?

Yes. There is a process to follow, but if you win lotto or inherit some cash you can use it to get your slate wiped clean. There is a way of accomplishing this properly; just give us a call first.

Suppose someone is bankrupting me; is there anything I can possibly do?

Generally, if you owe money to someone they can obtain a court order and bankrupt you. They need to follow a process, but it is possible. What you need to avoid at all costs if possible is another person bankrupting you, as it’s always best to voluntarily file for bankruptcy. Unless you enjoy court cases and annoying phone calls, of course.

What if my company has received a Demand or Wind-Up notice; can I still go bankrupt?

Yes. However, this is a challenging process and we suggest you get some expert advice; if its handled incorrectly, it could be disastrous. For a free consultation phone Bankruptcy Experts Wollongong 1300 795 575.

Do I need to contact my creditors?

No, we do that for you. As a matter of fact, we serve as an intermediary or a midway point between you and your creditors. So essentially you are not obligated to notify them of your bankruptcy; we do that for you.

How long does bankruptcy last?

3 Years.

How long does it take to file for bankruptcy?

Usually, it takes about 2 weeks.

What if someone else signed for a loan (joint loan or guarantor) and I go bankrupt; will they still be liable for the debt?

Yes. Typically a lender will pursue the other person who signed the loan papers with you for the total of the remaining debt owing on the loan.

What happens to a debt I forgot about at the time of becoming bankrupt?

Don’t panic! If you overlooked a debt and remember it later, just speak to your trustee with the name of the creditor, address, date the debt was acquired, amount of debt and any account or reference number/s provided by the creditor. Your trustee will add the creditor to your bankruptcy paperwork and mail a notification to the creditor.

Do I have to go to court if I go bankrupt?

No. We deal with the entire process for you.

What if I have gambled some of my funds and I go bankrupt; will I get in trouble?

Usually this is not a problem, so if you are a gambler, don’t worry. What the trustee doesn’t like is inconsistency here. In other words, you have never taken a chance in your life and all of a sudden you lost $50,000 on the horses, then you might have some explaining to do, of course, because it just doesn’t add up.

Can my bankruptcy be done over the phone?

Yes. We appreciate you are busy. If you have a phone we can help you; simply give us a call on 1300 795 575.

What if I’m living offshore; can I still go bankrupt?

Yes. This is possible. It necessitates some emails to and fro but it can be carried out.

Can I include my overseas debts in my bankruptcy?

Yes. If a person originally living in another country is now residing in Australia files for bankruptcy and they have a debt incurred in that foreign country, you just list that debt on the paperwork.

In most cases the creditor overseas will eliminate the debt. It is possible and legal for them, however, to reject your application, and if you revisit that country you may be subject to their bankruptcy laws.

How will the trustee know what assets I have?

There are a few ways the trustee can discover, and the most ideal and easiest way is for you to inform them when we do the paperwork. There is also a government website which has major assets listed also. You ought to get some advice about assets; be careful.

Can I keep an inheritance if I file for bankruptcy?

This is tricky and you will require the correct assistance, so if you need more information about inheritances phone us on 1300 795 575.

Will I lose my Pension or Workers Compensation payments if I go bankrupt?

No. The income thresholds are the same for everyone so no matter how you earn your income you need to earn about $50,000 each year before your income will be impacted by bankruptcy.

Will I have the ability to keep my tax returns once I’m bankrupt?

Yes, if you owe the tax office money. Put simply, if none of your debts is tax debt, then no, the Australian Tax Office will keep the money you owe them.

No, if you do not owe the tax office money. Your income tax return is deemed net income, so if you are beneath the threshold amount you can earn while bankrupt then you will get your entire tax return back.

What about child support ?

If you are required to pay child support, this money will be deducted from your net income, so what you get to keep after you pay your tax and then child support is considered net income. That is why in the world of bankruptcy net income numbers are always quoted.

Can I buy shares and make investments while I’m bankrupt?

Yes, you are permitted even while you are bankrupt, but the trustee will take them off you, as they are deemed an asset.

What assets can I keep if I go bankrupt?

You can keep practically everything except big things like houses, cars, shares and inheritances. Even things like houses and cars may be able to be saved. Just give us a call before you make any rash decisions on 1300 795 575 for Bankruptcy Experts Wollongong.

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