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Go Bankrupt With No Assets

Can You Go Bankrupt With No Assets?

Can You Go Bankrupt With No Assets?

Going bankrupt in Australia is an option for deeply indebted people, especially if they have few to no realistic options for repaying their obligations. So, if you cannot satisfy creditors with various plans to settle your obligations, declaring bankruptcy may not be a terrible option. But where do you begin?

We’ll explain all you need to know about declaring yourself bankrupt in Australia in this detailed guide. You’ll learn what bankruptcy is and some of the key issues you should be aware of before beginning the process of going bankrupt in Australia.

So, let’s start!

 

What Is Bankruptcy?

Bankruptcy is the process when debtors do not have the financial capacity to repay their debts to creditors. Bankruptcy helps borrowers prevent debt collectors from constantly nagging them about required payments. Furthermore, once you’ve been bankruptcy declaration from the government of Australia, the majority of and in some cases all of your debts are usually forgiven.

In exchange, you must agree to repay your creditors as much as possible through a repayment schedule or by selling your assets. However, if you are going bankrupt with no assets, your creditors will get nothing in return, and you will get free of debts after the bankruptcy declaration. After the bankruptcy procedure is completed, you will be given a fresh financial start.

However, it is important to highlight that going bankrupt in Australia is only available to people, not organisations. If you run a business as a sole proprietorship or partnership, you or your partner can file for bankruptcy as distinct entities. Remember that the company cannot go bankrupt.

Eligibility Criteria and Requirements

There are no hard and fast rules for going bankrupt with no assets in Australia, and it has the same criteria as that for people who have assets. These requirements include:

⦁ You have a residence, business, or are present in Australia.
⦁ You are unable to pay your creditors in the set time.
⦁ If you are currently bound in a debt agreement, you will have to cancel it before applying for bankruptcy in Australia.
⦁ You will have to pay no fee for registering yourself bankrupt.
⦁ There is no certain minimum or maximum amount of debt to apply for bankruptcy in Australia.

Before You Apply for Bankruptcy

Remember that bankruptcy is your last resort, and you should not opt for it if you can work things around. Although bankruptcy seems like an easy way out, it comes with many consequences, and you might not like some of them.

We suggest you contact a debt management professional such as Bankruptcy Advisory Centre to explain your situation, including how much debt you need to pay off and your deadline. They will examine your position and provide you with guidance and choices for debt management.

When applying for bankruptcy, it would be best to know your options before you get into further proceedings:

⦁ Your advisor will ask you or contact your creditor themselves to negotiate your situation. You can ask the creditor to give you some extra time to pay off your debts or reduce the amount. that you want to avoid going bankrupt and inform them about your financial issues or any other barriers preventing you from paying off the debts.

The creditors might understand your problem and accept to find a middle ground to repay a sum of money you can afford within an agreed period – known as a Debt Agreement. However, if your creditor does not accept to compromise, he can file a lawsuit and make you bankrupt.

⦁ You can also opt for the Declaration of Intention, where the law permits you twenty-one days of security from your creditors and prevent them from taking any action against you. This can be a great opportunity to arrange money and pay your debt.
⦁ Another option can be pursuing your creditor to sign a Personal Insolvency Agreement with you which provides you with the flexibility of repaying a part of your debt in instalments. In this way, you can free yourself from some pressure, and it would become easier to pay off the money in instalments.

If these options do not work for you, then as we mentioned above, bankruptcy would be your last straw to get yourself out of all the debts. You will have to go through the following process of applying for bankruptcy in Australia.

Process of Applying for Bankruptcy

⦁ You must be aware of how much money you owe overall, as well as the nature of every debt. To establish your present debt condition, make a list of everything you owe. Analyse and arrange your debts based on their required amount and type. Then prioritise them based on the ones you want to pay off first.
⦁ Australian Financial Security Authority (AFSA) will then let you choose to either have an official or a registered trustee to administer your debts and help you with the process of bankruptcy. If you opt for a registered private trustee, they will have to fill a consent to act as a trustee form for their application or else you will get an official trustee by default.
⦁ You will provide your trustee with the information regarding your debts and income. Your trustee can also help manage your debts by selling your assets; however, if you are going bankrupt with no assets, this option will not be valid for you.
⦁ Applying for bankruptcy in Australia requires you to fill the statement of affairs and debtor’s petition form with the AFSA. Ensure that you go through all the requirements and give all the information as accurately as possible. Your trustee will firstly inform your creditors that you are bankrupt, so they will stop contacting you.

After applying for bankruptcy, you will be free from your unsecured debts such as rent, personal loans, and credit card payments. However, bankruptcy does not free you from HECS-HELP or child support debts, so you will have to discuss your payment options with your creditors.

Conclusion

Going bankrupt with no assets in Australia is a rather straightforward process. Once you’ve successfully completed the process, you are legally free from repaying any debts; nevertheless, several exceptions exist.

As a result, before you begin, we recommend that you chat with a professional debt counsellor in Australia, such as Bankruptcy Advisory Centre, about your unique financial position.

Reviews

  • As a Trustee in Bankruptcy, Ross Thomson is often required to think outside the box. As well as creative thinking, Ross brings compassion to the table.

    For Ross, it’s important to see the people behind the financial problem –not just numbers.

    Ross recently helped a bankrupt client who lives in a retirement village with her seriously ill husband.

    The unit she & her husband live in is not owned by them, but subject to a 20-year lease.

    The money to be repaid by the management was due only at sale, when the client finally left the retirement village.

    Sale of the unit was likely to take several years &, if he did sell the couple’s unit, Ross realised he would be effectively evicting them from their home, without resources or family to help them.

    Ross decided to contact the retirement village management & put a proposal to them that they prepay some of the moneys they would otherwise pay the client.

    The village management considered the proposal & have agreed to prepay some of the moneys otherwise due.

    The client is relieved that she will not be evicted & can now concentrate on helping her husband through his health issues.

    The moneys paid represented about 75% of what would have been available to creditors if they waited two years.

    It is a win for the client and for the creditors.

    Melinda
  • I made an appointment with Andrew after finding him on google. I was nervous and apprehensive about what to expect but he made the process of bankruptcy extremely uncomplicated and stress free, allowing myself the opportunity to get the fresh start I was so desperate for. Thank you Andrew I could not recommend you enough.

    Kristy
  • Making the decision to go bankrupt was not easy however once I had spoken to Andrew i felt all my anxiety disappear. Andrew does not judge you and he has an innate ability to put you at ease. He took care of the whole process for me again reducing the stress involved with completing paperwork.
    Thank you very much.

    Hayley Eastough
  • I will definitely recommend Andrew Bell to anyone contemplating bankruptcy. Don't wait! Andrew is there to help. With his knowledge, he can advise you of the best path to take and assist with the mind boggling paperwork.

    Best of all, he is there for you through your entire bankruptcy period. Get your life back, it's not as bad as you think. Thank you Andrew for lifting the burden and allowing me to move on.

    Karilyn Mahon
  • I saw Andrew for 'advice only' on possible bankruptcy due to a divorce. Left an hour later with the paperwork all done and feeling like a new person!

    Andrew was extremely welcoming and made me feel so comfortable with my decision to proceed immediately.

    This was the best investment I have ever made and cannot speak highly enough of Andrew. He doesn't just give excellent service his follow up afterwards is amazing. Thankyou Andrew you made my 'new' life so easy to achieve!

    Vicki Johnston
  • Andrew was very helpful in helping me through the bankruptcy process, as a single mother left with a massive debt from my ex and our previous marriage. I was struggling to keep my head above water on a week to week basis.

    Andrew made me feel at ease immediately and helped me every step of the way, he happily and professionally answered any and all questions I had before, during and after the process. Thanks so much for your help Andrew!

    Aisha Edmonds
  • Would highly recommend Andrew to anyone having financial difficulties. Andrew made me feel very comfortable - he took care of everything and keep in regular contact with me throughout the whole process.

    Service was fantastic and he also keep in regular contact with me when everything had been finalised Thanks Andrew! can now get my life back on track.

    Cassandra Walsh
  • Very prompt service and excellent source of knowledge and information, I highly recommend Andrew's service for a quick turn around of circumstances.

    Eve Damjanovich
  • Andrew put my mind at ease in one easy appointment. Very satisfied with the outcome and service provided. Highly recommend Andrew.

    Tracey Douglas
  • Andrew was a steadying hand with his advice.Showing that things aren't as bad as first thought nor any obstacle insurmountable. If you have questions needing answers, Andrew is the person to ask. Thanks for your advice Andrew.

    Shane Thompson
  • Andrew was very knowledgeable, caring, helpful and compassionate when I went and saw him. He made me feel that I wasn’t the loser and failure that I thought I was being. Even down to the box of tissues on the table.. which I needed. Highly recommend to go see Andrew if your struggling. There is life after!

    Joanne Parker
  • Andrew and his team do an excellent job of helping their clients with bankruptcy advice and it is a pleasure to work with him.

    Gareth Lane
  • Don't hesitate contacting Andrew, I was stressed, struggled sleeping through debt. Andrew put me at ease. He listened to my situation and we decided on my next move. Andrew is professional and easy to talk too. I would recommend highly to anyone who wants help to give him a call. I appreciate your support Andrew. Regards Brett.

    Brett
  • Andrew has given me back my life!!! After living paycheck to paycheck, I didn’t know what to do. Until I made the big step and booked an appointment with Andrew. As soon as I left his office I felt a huge weight lifted!!!

    Deezy H
  • Andrew was prompt, organised, friendly and efficient with the processing of my documents and made everything very simple for me so I didn’t need to deal with the added pressure and stress. Thank you Andrew for allowing me to start afresh and getting it done within a matter of weeks.

    Kristy-lee

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