Bankruptcy is not the end. It is a chance for a new beginning
Bankruptcy is generally the last resort for people experiencing financial difficulties.
Too often the feelings of embarrassment around money problems stop people from admitting they have a problem. This is the worst approach as there are solutions, such as informally dealing with creditors or having a formal arrangement (i.e. a Part X agreement) which can help.
What is bankruptcy and what are the consequences
Bankruptcy is a legal process that releases people from most of their debts. If you are declared bankrupt under the terms of the Bankruptcy Act that means you are insolvent.
There are a number of consequences and implications of being declared bankrupt so it is not a situation to be entered into lightly. These include:
- Being automatically disqualified from managing any corporations or becoming a director, alternative director or company secretary without permission from the Court.
- Your most significant assets will be sold to repay creditors.
- Higher income earners may have to make compulsory payments to the bankruptcy trustee during the bankruptcy term.
- There is likely to be a negative impact on your professional qualifications.
- Creditors are unable to commence or continue the legal recovery of their debts.
Misconceptions around bankruptcy
There are also misconceptions around bankruptcy. Specifically, bankrupts are allowed the following:
- They can generally retain all their household furniture and effects.
- They are allowed to retain a motor vehicle and tools of trade up to certain values.
- They can generally retain their superannuation.
- They are not imprisoned for simply not paying their debts.
You should seek expert advice first
Before anyone enters into bankruptcy, they should seek expert advice and consider all other available options, as in many circumstances there are alternatives.
If you think you may be insolvent, WAIS can help you work out your best options and, if bankruptcy is the most appropriate solution, we will provide guidance and support throughout the process.
WAIS staff pride themselves on treating clients with compassion while employing their professional skills to find the best possible solution for their clients.
Are you unable to pay debts?
Discuss your options with an expert. Message our bankruptcy professionals today
Key bankruptcy points to keep in mind
What is bankruptcy?
Bankruptcy is a legal process that releases a person from almost all of his or her debts.
Bankruptcy is not the only answer
A person should consider all options before declaring bankruptcy.
Consequences of being declared bankrupt
The consequences of being declared bankrupt are far-reaching so while it can be a workable solution, it is best avoided where possible.
Support and guidance
We will help assess what your best optoins are. If bankruptcy is the optimal path in your case, we will support and guide you through the process.
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