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Bankruptcy In Australia Affects Many People
Everyone has financial problems once in a lifetime, some people has more than a fair share of it and take extreme measures to settle themselves out of debt. It occurs in every part of the world. Bankruptcy creates bad credit reputation. However bankruptcy in Australia lasts for 3 years from the day it was filed for.
Any person can file for bankruptcy in Australia when they feel that they cannot offset their outstanding debts to their creditors in which they voluntarily petition for bankruptcy. But they are to be in the country while doing so. Also, the creditors can also apply for bankruptcy of the debtor in the court so long as they can prove that more than five thousand dollars is owned to them.
When an individual applies for bankruptcy in Australia, creditors stop disturbing the debtor, a registered trustee becomes appointed to sell the debtors assets to pay the creditors, they thoroughly investigate the debtors statement of accounts for inconsistencies.
Debtors has the right to choose their own trustee but the creditors can always change the trustee. The debtor has to declare his assets truthfully and inform the trustee about change of name, new income and new money gained failure to comply will lead to penalty such as the trustee extending his bankruptcy duration of three years to five.
The debtor cannot assume high positions in job places, and should disclose his bankruptcy, but whenever these restrictions are contravened by the debtor, he pays a fine. But the debtor is can work and get to keep some of his personal effects such as car, household furniture and life insurance as specified in the bankruptcy act of 1996.
The bankruptcy file is recorded on the National Personal Insolvency Index which records the debtors bankruptcy for seven years even when he or she is discharged. The debtor can apply to the magistrate court for annulment of bankruptcy if he sets up a satisfactory means of paying off his debts to his creditors. Bankruptcy should be avoided to prevent bad credit reputation.
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