Before you contemplate bankruptcy, it is important to know there are other alternatives.
Bankruptcy is the legal process that controls the affairs of those who are insolvent, meaning those people who are unable to pay all their debts as they are due. However, it is important to note that bankruptcy is not the inevitable result of all those who become insolvent. Bankruptcy is usually administered by the office of the Inspector General in Bankruptcy and it usually lasts for three years.
There are two ways that a person can become bankrupt:
1. Involuntary bankruptcy through a sequestration order- which is made by the court on the application of a creditor; this means that the debtor becomes bankrupt.
2. Voluntary bankruptcy – this is where the debtor presents the Official Receiver with a petition, if there is no pending application by a creditor to bankrupt the debtor and if the petition is accepted, the person becomes bankrupt.
However, there are other options before filing for bankruptcy. These include:
• Coming to a private informal arrangement with individual creditors
• Coming to a private agreement with creditors
• Entering into a private agreement or
• Proposing a debt agreement
The benefits of bankruptcy for people who are insolvent are:
• That the burden of the debt is removed
• They can “start fresh” after the bankruptcy and
• It may be possible under certain circumstances to have an early discharge or arrangement with creditors
Before you contemplate bankruptcy contact our dedicated team of lawyers and accountants who can provide you with advice and assistance with your bankruptcy questions. Contact us now by submitting an online enquiry form or call 1300 QUINNS or +61 2 9223 9166.