All You Need to Know About Voluntary Bankruptcy

Bankruptcy applies to individuals just as the term Liquidation or Administration applies to organisations. There are two ways to attain the bankruptcy tag. Either your creditor, dismayed by your continued defaults, forces the bankruptcy label on you or you yourself decide on voluntary bankruptcy.

Being placed under bankruptcy

If you can prove your debt and subsequent inability to clear those, courts will not hesitate in placing you under bankruptcy. For such occasions, it is significant to hire a bankruptcy trustee who understands protocol and legalities involved in the process. Bankruptcy can be emotionally stifling and also presents a social stigma so the decision to go voluntarily bankrupt should not be taken out of pure fancy.

The bankruptcy tag can remain up to 7 years

However, if you feel you are on the verge of a mental breakdown and that your finances have really taken a toll on you, you can use bankruptcy as a shield to put your feet up for a moment, without bothering about the liabilities. The bankruptcy tag remains with you for a minimum of three years and can extend up to seven years unless you get it revoked earlier, citing a change in your financial fortunes.

Statement of Affairs

When you file for voluntary bankruptcy, the first thing is to create a debtor’s petition and a Statement of Affairs. The latter document argues your point in the court of law. It should ably furnish all your debts. It is advisable not to hold back from documenting even the most irrelevant or nominal ones. The Insolvency and Trustee Service Australia (ITSA), now known as the Australian Financial Security Authority (AFSA), takes up all the debtors’ petitions.

The official reviewer acting on the behalf of the AFSA has the authority to reject any petition but the situation arises only when he is assured that the person filing the petition is sound enough to clear his debt (at least in parts).

Bankruptcy involves legal intricacies and a deft lawyer can keep your side effectively in the court of law. You can get in touch with us here, we will be glad to assist you.