What happens when you declare bankruptcy? (2)

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What happens once you become bankrupt?
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• You can become bankrupt within 10-14 days, and
  the first step is getting a bankruptcy trustee.
  Perhaps you will choose me.
• As a result, almost all your debts (debts and
  liabilities or provable debts, in bankruptcy
  terms) become owed by your bankrupt estate, not
  by you. You are now debt free, or almost debt
  free.

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• There are exceptions anything you owe to
  Centrelink, Child Support and HECS. Court-imposed
  fines and debt as a result of fraud are also not
  covered.

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• If you want to keep an asset that is allowed
  under the law, such as a car and maybe your
  house, you must continue to pay for it.
• This is called secured debt and I will cover
  them later. For now, were most concerned with
  the most common type of debt unsecured debt.

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• This is the dead-end sort of debt that burdens
  most people and what I come across most of the
  time credit card debt, tax debt, store card
  debt, phone debt, personal loan debt, and the
  like. Does that sound familiar?

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• When you go bankrupt this sort of debt is simply
  cancelled immediately as far as you are
  concerned.
• You personally dont owe it any more full stop!
  Instead, your bankrupt estate owes it, and your
  trustee will manage it.

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• One thing is very important to note if you have
  been paying any of this type of debt by direct
  debit, go to the bank and cancel the arrangements.

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• This is extremely important as with both the
  alternatives to bankruptcy Debt Agreements and
  Personal Insolvency Agreements you are not
  released from your debts until the final
  repayment is made.
• That could be five years, or longer.

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• Once the bankruptcy is in place, your bankruptcy
  number and date of bankruptcy are recorded on the
  governments database the National Personal
  Insolvency Index (NPII).
• You are there forever. It is a public document
  and can be accessed if a fee is paid, but this
  rarely happens.

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• What it does mean is a black mark against your
  name with the commercial credit rating agencies.
• Its there for five years. Thats the credit
  rating to worry about. You may already be listed
  as having bad credit risk.

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• Once you are bankrupt, your trustee will contact
  your bank and all your creditors to let them
  know, and ask them to contact him/her regarding
  the chances of your debt being repaid.
• Your bankruptcy is not advertised in a newspaper.

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• Once you have gone bankrupt, your creditors are
  not allowed to contact you about your debt and
  they cannot reappear in three years time.
• Your trustee will secure any assets that will be
  part of your bankrupt estate and begin managing
  it while you put the stress of unpaid debt behind
  you, and get on with life.

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• There are other options apart from bankruptcy and
  you can read about them on this website, but in
  most cases I believe bankruptcy offers the most
  effective solution.
• It provides immediate release from the debt and
  recognises you as a human being.

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• It also allows you the chance to earn a minimum
  level of cash-in-hand income (always more than
  1000 a week) and to keep certain property so you
  can live properly.

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• Once you have the protection of bankruptcy, you
  will find your focus will change from constant
  worry about the debt, to regrouping, living your
  life and recovering from the financial distress.
• Life will be happy and productive again, and you
  will regain your self-esteem.

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