FAQ

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Frequently Asked Questions

Are the consequences bad?

It all depends on your particular
situation, and we can help shed some light. There are a number of thresholds
pertaining to what you can and can’t keep as a bankrupt. These thresholds are
available at https://www.afsa.gov.au/insolvency/how-we-can-help/indexed-amounts-0.

What are my other options?

For a comprehensive list of your
other options, it may be best to speak with a financial counselor. More
information can also be found at the AFSA website https://www.afsa.gov.au/insolvency/i-cant-pay-my-debts/what-are-my-options.

Won’t everybody know my situation?

Bankruptcy is an extremely private process. Over 18,000 Australians declare bankruptcy every year, so it happens much more often than you think. Chances are, you have already met many people who have declared. There is no need to attend court, no need to meet with anyone in person. We can help you complete your bankruptcy from home, and the only people who know about your situation are the ones you tell. Your name is recorded on the National Personal Insolvency Index, but your bankruptcy is deleted off your credit file 2 years after you are discharged.

How long will it last?

Bankruptcy normally lasts 3 years
and 1 day from the day that your bankruptcy application is accepted by AFSA.
Your bankruptcy will be recorded on your credit file for 5 years (or another 2
years after you have been discharged, whichever is later) but after that, it is
cleared. We’d be happy to discuss your situation with you, obligation free.

Can I get credit again?

Bankruptcy is removed from your
credit file 2 years after you have been discharged. From there, your ability to
obtain credit is in your hands and will depend on your circumstances. Credit lending practises
are up to the discretion of each individual financial institution. You may still be able to acquire a credit card for
emergencies while bankrupt, though you will have to disclose to your lender if
you want credit over $5726 (during your period of bankruptcy).

Will I lose my personal items?

Not at all. Nobody is coming to your house to take your television or fridge. All of your household items can be kept. There is no effect on your day to day life, other than the removal of all that stress.

What about my car?

In many cases, you can keep your car.
It depends on the cars wholesale value, and how much you still owe. If your car is worth under $7700 then it’s yours to keep. This applies to equity in the car as well. For instance, if you owe $15,000 on your car loan, and the car is worth $20,000: you can keep it. Even if you bought the car for $30,000 2 years ago, it will not be worth that amount now. Wholesale values are used in the equation, so give us a call and can tell you exactly how this applies to your situation.

Will my income be affected?

You may think that everything you
earn while being bankrupt gets taken by the government. That’s not the case, you are welcome to earn as much as you like, though you may
be subject to some income contributions depending on your income. The threshold
starts at $56,674.80 per year (after tax) and increases if you have dependents
at home.