There are a number of things you need to consider before making the decision to go bankrupt. Here are 5 major factors to consider before you do:
The immediate benefit to declaring bankruptcy is that creditors cannot pursue any legal action. Sometimes just this alone is enough to make someone decide to declare bankruptcy as the legal ramifications of going to court may be too great. It also means the creditors are prevented from pursuing their debts against property that is secured.
Bankruptcy is actually split up into two periods. The ‘undischarged bankruptcy’ period which lasts for 3 years, during which time as per the Bankruptcy Act, restrictions apply; and the ‘discharged bankruptcy’ period which last for a further 2 years where no restrictions apply.
If you have gone bankrupt voluntarily and provided accurate information when doing so, it is highly unlikely you will need to appear in court.
Generally speaking, bankruptcy does not affect your employment or your ability to work however there are some trades and professions where professional associations or licensing authorities may impose restrictions. Your employer will not be aware of your bankruptcy unless you owe him/her money or unless you have failed to pay compulsory contributions.
Declaring bankruptcy will mean that you won’t be able to obtain a mortgage loan for up to five years; however that doesn’t mean you will be out of the property market forever. Ensuring your bills are paid, you’ve had stable employment and managed to save a deposit during your bankruptcy period will give you a fighting chance at being approved for a loan.
For more advice about bankruptcy in Sydney, Melbourne or Perth contact one of our experts today!