Bankruptcy Lawyer – Melbourne
Bankruptcy Lawyer – Melbourne
In the regrettable event that you are no longer able to service your debts, or happen to find yourself unable to pay back creditors, it may be best for you to consider bankruptcy. Deciding whether or not bankruptcy is the right choice is difficult, of course, but a bankruptcy solicitor will be able to assist you in understanding your rights and responsibilities relating to bankruptcy as well as the consequences which come with being declared bankrupt.
Under the Bankruptcy Act, a person can become bankrupt in the following three ways:
• Deceased bankruptcy – A deceased person’s creditor or legal representative are able to petition for an order which would treat the deceased as being bankrupt
• Forced bankruptcy – Occurs when a creditor successfully files a creditor’s petition, and the debtor is declared bankrupt
• Voluntary bankruptcy – Occurs when a debtor files a debtor’s petition, seeking to be declared bankrupt (this is what constitutes about 90% of bankruptcies).
Bankruptcy has two primary purposes:
• To fairly distribute the assets of a debtor amongst creditors, in order to allow those creditors to recoup as much of the debt as possible; and
• To give the debtor a fresh financial start by clearing them of debt.
There are alternatives to bankruptcy, which may be available to you depending on your individual circumstances. It is worth considering these alternatives, as there are consequences for being declared bankrupt. Upon being made bankrupt, a permanent record of your bankruptcy will exist on the National Personal Insolvency Index (NPII), which is a register of all personal insolvency proceedings. Anyone can access your NPII record, which will contain personal information about you such as your name, address, and date of birth.
Some alternatives to bankruptcy are:
• Entering into a debt agreement
• Making an informal arrangement with creditors
• Declaring your intention to present a debtor’s petition; and
• Entering into a personal insolvency agreement.
In the event that you are made bankrupt, a trustee will be appointed to oversee the distribution of your assets amongst creditors. A trustee will:
• Recover any income you earn over a certain limit
• Investigate your financial situation, and potentially recover assets or property which you have transferred to another party prior to being made bankrupt; and
• Sell your assets and property, including any that you became entitled to or acquired during your bankruptcy (although you are able to keep certain types of assets).
Due to the ramifications of bankruptcy, it is vital that you fully understand your financial and legal circumstances, and whether any alternatives are available to you. You may be entitled to dispute the debt, so it is important that you obtain legal advice before commencing bankruptcy proceedings.
In the event that you are considering bankruptcy, or have been subject to the filing of a creditor’s petition, LGM Advisors expert financial lawyers stand ready to assist you in making the right decisions for your personal and financial well-being.