Critical Warning Signs Of Financial Distress
Statutory Demand Notice
A Statutory Demand Notice is a written, formal request from a creditor requiring a company to pay an outstanding debt within 21 days of service. Ignoring a statutory demand has serious consequences. If you choose to ignore the demand, your company will be presumed to be insolvent, leaving you exposed to applications to wind up your company.
Essentially, a statutory demand notice is a tool used by a creditor in order to get a debtor to pay their outstanding debts. To see an example of a Statutory Demand Notice, click here.
ATO Debt Collection Warning Letter
The ATO have powers under the Taxation Administration Act 1953 to collect debt which is owed to them. If you have received a warning of debt collection action letter from the ATO, it is likely your ATO debt is significantly overdue and that further, more serious actions will take place unless debts are settled immediately.
These actions could include:
- issuing a notice to your bank, employer or third parties requiring them to pay the ATO your outstanding debt
- issuing a director penalty notice for company debts
- hiring a collection agency to recover payment
- commencing bankruptcy or liquidation proceedings
To see an example of an ATO debt collection warning letter, click here.
Letter of Demand
It usually gives the owing party one last chance to pay what is owed before more serious action takes place. To see an example of a letter of demand, click here.
Director Penalty Notice
How Long Will My Bankruptcy Last
Bankruptcy lasts for three years unless your trustee lodges an objection to you being discharged and then the bankruptcy can be extended for an additional five years.
Bankruptcy is a last resort and has serious consequences.
If you are in debt and want to know more about the solutions available to you contact us on 1300 217 538.
Can I Stay In My Home While It Is Being Sold
Usually, if you are bankrupt, you are not expected to immediately move out of your home. In normal circumstances, the trustee will give you a few weeks to make alternative arrangements.
In some cases, the trustee may allow you to stay in your home during the selling period, provided you assist with the sale process, contribute a fair rent and maintain the home.
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Consolidate Or Rehabilitate Your Loans
Another way to resolve debt in collections is by consolidating your loans.
Note that only federal student loans are eligible for consolidation and rehabilitation . Private student loans are eligible for consolidation through refinancing with a private lender, but youll probably have a tough time qualifying if youre in student loan collections.
You could try speaking with a lender about your options, and find out if adding a cosigner to your refinancing application could help.
Do I Need To Become Bankrupt
Bankruptcy may seem an easy and attractive option if you want to deal quickly with your creditors. However, it has consequences which you should know about before you consider taking this step. Find out from Fox Symes the other options which may be used to address your financial situation. You may not have to go bankrupt.
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How Are The Proceeds Of Sale Distributed
If you are the only owner of your home, your secured debts are paid first out of the sale proceeds. The remainder of the sale proceeds are given to the trustee to pay your unsecured debts and trustee fees. Any remaining funds after this distribution will be given back to you.
If the home is owned by two people, your secured debt will still be repaid first. However, any remaining funds will then be divided in proportion between both co-owners. The trustee can then use your portion to pay off your unsecured debts.
If the trustee sells the house, they can use that $75,000 to pay Adams unsecured creditors. However, if the $50,000 mortgage was only in Adams name, the final share of the home would be:
Adam: $100,000 $50,000 = $50,000
Therefore, the trustee would only be able to use the $50,000 from Adams share to pay the unsecured creditors of his debts.
Explore All Your Options First
Before considering bankruptcy or a debt agreement, make sure you explore your other options for dealing with unmanageable debt.
Options could include:
- asking for more time to pay
- negotiating a flexible payment arrangement
- offering a smaller payment to settle the debt
You can get help with these from a financial counsellor.
Call the free National Debt Helpline on 1800 007 007. The helpline is open Monday to Friday, 9:30am to 4:30pm.
Financial counsellors can also help you understand the impacts of bankruptcy and debt agreements.
Dealing with unmanageable debt
Effie Zahos from Money Magazine explains the options.
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How Do I Become Bankrupt
When you feel unable to pay your debts and you cannot come to a satisfactory arrangement with your creditors then bankruptcy maybe your best option. You may voluntarily lodge a debtor’s petition to become bankrupt.
A creditor may also bankrupt you. Once you have spoken with Fox Symes and, after reviewing your options, you have decided that voluntary bankruptcy is your best option, Fox Symes will assist you in taking the necessary steps to become bankrupt. You do need to befully informed because the consequences of bankruptcy are serious.
Consequences To Declaring Bankruptcy In Australia
What you need to know before declaring bankruptcy or insolvency in Australia
Get Out of Debt Today treats declaring formal personal bankruptcy and insolvency in Australia as an absolute last resort. Declaring formal bankruptcy can have long lasting negative impacts on your finances, namely your credit rating and ability to borrow money in the future. In some cases, a black mark against your personal credit rating can severely restrict your financial earning capability and liberties for up to 7 years. Furthermore, declaring bankruptcy means that you will be listed on the publicly accessible National Personal Insolvency Index – this is permanent. the NPII is an electronic register of all personal insolvency proceedings. This list can be accessed by any person and will include personal information about yourself including your name, D.O.B. and address.
One thing that many Australian people are unaware of is that in actual fact you will be listed on the Australian NPII for simply lodging an application for a debt agreement. Lodging a debt agreement is actually an act of declaring yourself bankrupt. This is an official act of bankruptcy in the eyes of Australian law even if your debt collectors do not accept it. Debt collectors, creditors and insolvency lawyers will be able to use your debt agreement application against you in court of law to force you into bankruptcy.
“…You will not be able to go overseas without obtaining the trustee’s permission in advance…”
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Get Out Of Debt Today: An Alternative To Declaring Bankruptcy & Insolvency
Finding your way out of debt can often be an overwhelming task you are most likely stressed , scared, and probably out of your depth with the wealth of legal jargon.
Get Out of Debt Today can help you. They have wiped off up to 90% off some clients debt without entering into any form of debt agreement or filing for bankruptcy. Fill out the online form at to find out more and receive a tailored plan of attack for your unique circumstances. Get Out of Debt Today.
What You Need To Apply For Bankruptcy
When completing a bankruptcy form you will need to give details of:
– your income- your assets – your debts- any business, company and trust involvement.
You will need things such as pay slips, Centrelink statements, bank statements, account numbers and details of any court cases you are involved in.
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Make An Informed Choice Before Choosing Bankruptcy
Before making any decisions regarding your financial situation, we recommend seeking counsel from a reputable institution and evaluating your options in regards to avoiding bankruptcy. AFSA is the government body responsible for the processing and regulation of the Insolvency Sector. Their website is a comprehensive resource for those considering bankruptcy.
At Life After Debt ®, we offer general bankruptcy advice in Perth for those who require it. To find a way to get out of debt and avoid filing for bankruptcy in Australia, call our friendly team on 1300 237 669 for a free initial consultation.
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Extremely good service, the whole process and our options were explained really well and we have no hesitation in recommending your firm.
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They provided me with a plan that suited me and my budget which helped me get back on my feet quicker.
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You Will Have A Trustee That Will Manage Your Bankruptcy
Before you apply for bankruptcy, you can choose a registered trustee to administer your bankrupt estate. If you do not choose a registered trustee AFSA may seek the consent of a registered trustee to manage your bankruptcy. If a registered trustee does not provide their consent to act then your estate will initially be administered by the Official Trustee .
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What Does Bankruptcy Mean For Sole Traders
Written by Daniel Fane
When starting a business, a sole trader structure is the most simple and most frequently used. However, just as they receive all profits, they alone are liable for all the debts of the business.
Under the law as a sole trader, you and your business are essentially the same entity. So, what does this mean then if your business cant pay off its debts?
Keep Trading As A Sole Trader If You Are Bankrupt
After years of working to build your business from the ground up, the thought of losing it all because your personal finances are dire is a nightmare. It is still possible to keep trading as a sole trader if you are bankrupt or personally insolvent. We expose how to save your business when things are tough!
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Personal Insolvency Agreements Melbourne Victoria Perth West Australia And Other States And Territories
Personal insolvency agreements in Melbourne, Victoria, such as those arranged through Debt Assist, involve fees to process, propose and manage the agreement.
To find a reputable to personal insolvency agreement in Perth, West Australia and other states and territories, PIPA has a list of qualified practitioners on its website pipa.net.au.
In certain cases, some debts will prevail, which is why anyone seeking advice should see the What does a PIA cover? list on the Australian Financial Security website. This is a good way to check whether your personal insolvency agreement practitioner is showing you all the options available.
A PIA is just one option available under the Bankruptcy Act to manage debt. Other options include temporary debt protection, debt agreements and bankruptcy. There are also other options available which can be explored by visiting What are my options for dealing with unmanageable debt?
However, entering a PIA may impact future employment and credit and will appear on a public register permanently as the government outlines in What are the consequences of a personal insolvency agreement? Which is why it is so vital to employ a professional to assist with a personal insolvency agreement in Australia.
Debt Solutions to help you:
- Save your house or car
- REDUCE THE STRESS
- Be debt-free in 30 to 60 months*
- Reduce future interest
You Don’t Have To Declare Bankruptcy Or Enter Into A Debt Agreement
NO Debt Agreements, NO Bankruptcy, NO Defaults
We differ from other services in Australia in that we do not use debt agreements. Debt agreements are simply another form of bankruptcy. A form of declaring personal bankruptcy, debt agreements will negatively affect your credit rating, limiting your personal freedom and opportunities for the future. However, rest at ease as you dont need to have a credit default or black mark listed on your record to solve your debt problems.
“…I saw a number of professional advisors about my situation, but only Get Out of Debt Today gave me the full solution to both my company and personal debt issues. Now even my credit card debt has been eliminated and I have no black marks. Why would anyone go bankrupt?!…”
Get Out of Debt Today offers a fresh perspective on debt solutions by offering a range of personally tailored solutions to wipe off up to 100% of your debt without affecting your credit rating, entering into a debt agreement, or declaring bankruptcy.
We offer you various ways to save your credit rating and avoid the harsh realities of bankruptcy. Talk to our debt counsellors today about the potential of getting you debt fully wiped, getting your life back on track. When you choose Get Out Of Debt Today, we make sure you retain the ability to borrow in the future. So you can purchase a house, start up a business or even go on holiday without a worry or concern.
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Insolvent Deceased Estates May Still Be Subject To The Bankruptcy Act
Recently we have had several enquiries about insolvent deceased estates and what needs to be done to properly wind up the estates affairs.
Winding up a deceased estates affairs is done by appointing a bankruptcy trustee to the estate. This may be done by a creditor or by the executor or administrator of the deceased estate by applying to court.
Section 244 of the Bankruptcy Act 1966 allows creditors to apply to bankrupt a deceased estate. Interestingly, if a debtor dies after the filing of an application for their bankruptcy but before the application is heard, the court may make the sequestration order as if it were an application to bankrupt a deceased estate.
Section 247 of the Bankruptcy Act allows the person administering the estate to apply to appoint a bankruptcy trustee when they conclude that the estate is insolvent.
This also throws into light the benefit of having a Will. If a person dies intestate , a decision must be made about who has the right to administer the estate before that person can apply for the appropriate order to bankrupt the estate.
The handling of a bankrupt deceased estate will be along the same lines as a bankrupt estate of a living person, with some obvious exceptions. The two major exceptions are:
There will be no discharge from bankruptcy.
There will be no assessment of personal income leading to income contributions. Any income derived from the estates assets is automatically an asset of the estate.
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What Are The Alternatives To Bankruptcy
If you’re considering bankruptcy due to unmanageable debt, make sure you’ve considered your alternatives before you apply:
- Negotiate directly with your creditors. Contacting your creditors and negotiating yourself can be an effective way of getting a handle on your debt. Some things you can negotiate include more time to pay, a flexible payment arrangement or even a smaller, lump sum payment to settle your debt. Explain your position to your creditors and they may be more willing to negotiate with you.
- Part 9 Debt Agreement. While this is a type of bankruptcy, entering into a Part 9 Debt Agreement is not the full act of declaring bankruptcy. Find out about the differences here.
- Personal Insolvency Agreement . Also known as a Part 10, this agreement is between you and your creditors and involves a trustee being appointed to take control of your property and making an offer to your creditors. The offer may be to pay part or all of your debts by instalments or in a lump sum.
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Leading Insolvency Advice For Perth Businesses And Individuals
Whether you or your business is facing the prospect of declaring bankruptcy, it is crucial to seek out professional and qualified advice that is specific to your situation. That is why clients turn to the staff here at Hamilton Murphy.
Our firms Partners, Steve Dixon and Richard Rohrt, are the first and third rated insolvency practitioners in Victoria respectively, meaning clients across the country can be sure they are dealing with a skilled and respected team who can tackle any case.
For sought-after bankruptcy advice, Perth clients know to call our staff.
When Should You Claim
Applying for Bankruptcy should be done when you feel you have absolutely run out of options relating to debt solutions.
Many people make the mistake of overlooking the facts and deliberately hold off on claiming bankruptcy for as long as possible because of the misleading negative connotations it brings to ones business or personal life. It is rarely as bad as the stereotypes would lead you to believe, and more often than not, it might be the best option that could save you or your business.
This being said, there are some consequences to bankruptcy, so be sure to make an informed decision, and understand all the implications before you apply.
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