Then bankruptcy could be an option that will free your client of the financial burden and provide them with the opportunity to regain control over their financial outlook.Kristen Triglone I Registered Trustee in Bankruptcy I Sydney Business Recovery and Insolvency
As a bankruptcy trustee, I have seen firsthand the positive impact that bankruptcy can have on people who are struggling with overwhelming debt. The key benefits of bankruptcy are the relief and fresh start that it can provide. It can allow individuals to get back on their feet and start working towards a more stable financial future.
If you have clients that are struggling with:
Higher interest rates
Higher costs of living from inflation
Keeping up with ATO payment arrangements
Lockdown Director Penalty Notice(s) that they cannot afford to pay
Overwhelming amounts of debt under personal guarantees from a corporate failure OR
Generally paying their bills.
Then bankruptcy could be an option that will free your client of the financial burden and provide them with the opportunity to regain control over their financial outlook.
Bankruptcy is a legal process which allows people to declare themselves unable to repay their debts. It is often viewed as a last resort for those who are struggling to manage their finances but sometimes it is a necessary step that provides relief and a fresh start financially.
However, bankruptcy it is not a decision to be taken lightly. It is important for people to fully understand the consequences. Before applying for bankruptcy, people should get advice about all of their options and consider whether it is the best decision for their circumstances.
Some key benefits include:
The discharge and relief from most unsecured debts, including:
Credit card debt
Debt personally guaranteed from a corporate failure
Asset protection for certain assets that a bankrupt person can keep, including:
Tools of trade
A motor vehicle up to a value of $9,100
Ordinary household items
Unsecured creditors are unable to pursue bankrupts for unpaid debt or commence legal proceedings for unpaid debts incurred before bankruptcy.
The key consequences of bankruptcy include:
Names of bankrupts permanently appear on the National Personal Insolvency Index which is a public registered that can be searched for a fee
It can have a negative impact on credit ratings and may affect one’s ability to obtain credit after bankruptcy
Some trades and professions have restrictions that may apply whilst people are bankrupt. For example: builders, accountants, and lawyers
People cannot act as a director or manage a company or act as a trustee whilst bankrupt
It must be disclosed when incurring credit in excess of $6,771 during the bankruptcy
Compulsory income contributions might have to be paid to the bankrupt estate if income exceeds a prescribed threshold. The threshold is increased with the number of dependants a bankrupt supports
Assets including any house may be sold by the bankruptcy Trustee
Written consent of the Trustee is required to travel overseas
Some debts are not discharged. For example: HECS & HELP, Child Support & Maintenance, Court imposed fines, and unliquidated debts
It lasts for three years
The perceived stigma associated with bankruptcy can take a toll on mental health and relationships.
Despite the challenges and stress involved, bankruptcy offers the potential for a new beginning, alleviating financial burdens, and rehabilitation from unmanageable debts.
If your client is grappling with overwhelming debt, bankruptcy could be a suitable solution. PKF is here to offer guidance tailored to their unique situation and assist them throughout the process. Please contact our Business Recovery and Insolvency team for a free initial consultation.