About bankruptcy - what are your options?
What is bankruptcy?
Bankruptcy is packed with a lot of emotions for most people. But what is it really. Bankruptcy is simply a process. More specifically a legal process where you declare yourself as being unable to pay your debts to your creditors. Declaring bankruptcy (being declared bankrupt) can release you from most debts, provide relief and allow you to make a fresh start.
What? Debts are wiped? Really!?!
If you are declared bankrupt/enter bankruptcy, you will find that most debts are covered. This means that you no longer have to repay them. A trustee will be appointed and in some cases, your trustee may sell your assets or use compulsory payments to help pay your debts. Obviously if you have no assets and have insufficient means of income nothing can be sold and payments cannot be deducted from earnings.
For Australians, here is a brief video from the Australian Financial Security Authority that explains it…
You can enter into voluntary bankruptcy. To do this you need to complete and submit a Bankruptcy Form via your regulatory authority. Different countries will have different criteria but generally you’ll find a lot of similarities.
It’s also possible that someone you owe money to (a creditor) can make you bankrupt through a court process. In Australia this is referred to as a sequestration order.
Bankruptcy is not for a lifetime but it is for a sufficient time that it is worth considering carefully. In Australia being bankrupt will normally last for 3 years and 1 day.
About Greg Huxley
You can find out more about the author Greg Huxley at the Huxley Corporate website www.huxleycorporate.com
Disclaimer:
This article does not provide any financial, legal, tax, investment or any other form of advice, professional or otherwise upon which you should or can rely. Seek your own professional advice for personal and business matters.
