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The stigma over declaring bankruptcy in Australia is not as bad compared to the days of your ancestors. This is why more and more Australians are going through bankruptcy now more than ever. One of the most prevailing misconceptions about bankruptcy is that it is a good deal to ward off debt collectors without any consequences. It’s not true at all that bankruptcy will not cost you anything. In fact, some of your assets can be sold to pay off some of your debts. Your Trustee can also seek a portion of your income to pay for your debts if you are earning over a certain limit. Credit rating gets a hit Perhaps, one of the biggest fallouts of bankruptcy is the negative effect it has on your credit rating. Bankruptcy is for 3 years however in some certain cases in be extended further. Bankruptcy is on your credit file for seven years and on the Personal Insolvency Index permanently. . Bankruptcy should be last resort Instead of bankruptcy, you can opt for financial hardship assistance or some form of debt consolidation, debt reduction negotiation or debt management. You should always consult the institution you owe money to first for assistance or contact your local financial counsellor or your local consumer groups. Long-term Effects of Bankruptcy Declaring bankruptcy in Australia may sound appealing to some people who are already in dire straits, but don’t go rushing into a decision without talking to a debt management company or financial counsellor. You have to know your options and weigh the advantages with the disadvantages of bankruptcy. You should also talk to your creditors and see if than can offer some assistance. As bankruptcy will remain on your credit file for seven it years, obtaining finance during this time will be difficult to obtain. Consequences of Bankruptcy Now, if financial hardship assistance yields no results and declaring bankruptcy is the only option available, you can declare bankruptcy by submitting your Statement of Affair to Australian Financial Security Authority (AFSA). Those who have no assets and income below a certain limit wont be required to pay their debts. If you have assets and income over a certain limit then you may be required to pay your creditors. There may be further restrictions such as certain employment, certain qualification and licences and travel overseas that may be affected. Author’s Bio: Author has many years of experience in content writing. He is the most celebrated and acclaimed author in financial sector. His many articles have been published online. Now he is writing for Debt Negotiators and providing information on financial hardship assistance and declaring bankruptcy in Australia online.
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