Personal Bankruptcy

If you are being chased by debt collectors, or facing a personal debt crisis such that you cannot see a way through, getting legal advice might be the last thing on your mind. But when your financial situation is really dreadful and it looks as though bankruptcy might be on the cards, it is crucial that you get professional advice.

Bankruptcy is a legal process that provides protections to people who are not able to pay their debts as and when they fall due. There are two ways to be made bankrupt:

  • you can volunteer to be made bankrupt; or
  • someone to whom you owe money (one of more of your creditors) can apply to the court for you to be made bankrupt.

Although bankruptcy can give you somewhat of a financial fresh start, you should not enter into bankruptcy without a proper understanding of what it means, because the consequences may impact you for years to come.

Some of the possible consequences of bankruptcy include that:

  • a trustee in bankruptcy will be appointed to deal with your creditors on your behalf;
  • some of the things you own may be sold to pay off your debts;
  • if you earn over a certain set amount, you may need to make compulsory payments to your trustee to be distributed to your creditors;
  • there may be restrictions on your employment or whether you can run a business;
  • there may be restrictions or conditions placed on you if you wish to travel overseas while you are bankrupt;
  • you will probably find it difficult to obtain credit – credit reporting agencies will keep a record of your bankruptcy for 5 years from the date you became bankrupt, or 2 years from when your bankruptcy ends, whichever is later; and
  • your name will permanently appear on the National Personal Insolvency Index.

Getting professional legal advice can help you achieve the best outcome for you. In some circumstances, that means bankruptcy, but there may be other options for you to consider, and it is important that you know what they are. For example, there might be a basis for you to dispute one or more of your debts, and it is sometimes possible to negotiate with creditors to reduce or remove your debt without having to declare bankruptcy.

Our highly experienced lawyers at PCL Lawyers can give you advice on what your options are, and help you to weigh up those options to get the best outcome in your personal circumstances. Contact our team today for a confidential discussion about your circumstances and how we can help you. Please fill out the enquiry box on this page or contact us on 1300 907 335.

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