Bankruptcy for a Fresh Start and Better Financial Management

The Bankruptcy Process

There are steps involved when considering bankruptcy. And it is wise to learn about the bankruptcy process which requires credit counselling and debtor education courses that you must complete before filing for bankruptcy and before debts are discharged. The courses requirement can help you with better financial management skills which become handy after you have successfully gone through the bankruptcy process.

Notably, the bankruptcy process can be complicated and quite daunting. This thus underscores the need for a consumer bankruptcy attorney to help you understand the bankruptcy laws that will help you make the right decisions about your financial future as well as your rights and responsibilities. There are real benefits associated with filing for bankruptcy—a course of action often necessitated by unforeseen circumstances such as job loss, emergency medical bills, and divorce, that result in an inability to pay off debts. To file for bankruptcy is such a lawful recourse that would protect you from the inconveniences of default in paying your debts. Some benefits include:

• the prevention or stopping of garnishment of your wages;
• the prevention or stopping of repossession of your car;
• the delay of a foreclosure on your home;
• and automatic stay of collection effort by creditors;
• the ability to dispute creditors’ claims; and
• key of all this is the discharge of all or most of your debts.


Key advantage of recourse to file for bankruptcy is the opportunity for a fresh financial start which provides you the leverage to again take control of your finances. Of course, not just individual consumers have the legal recourse to file for bankruptcy. Corporations typically use the bankruptcy process as well, to reorganize debts and finances of their operations.

However, there are non-dischargeable debts in bankruptcy proceeding. Typically among these are:

• child support obligations and other maintenance orders;
• student loans;
• certain taxes;
• fines and penalties imposed by a court of law or similar institutions;
• collateralized liens and other secured debts; and
• some Centrelink over payments and HECS obligations.

Bankruptcy Australia

In Australia, bankruptcy can either be voluntarily which requires you to provide the correct documentation and relying upon the provision of the Bankruptcy Act to make the process happen. Alternatively, a creditor can seek to have you declared bankrupt through the courts. Nonetheless, to file for bankruptcy in Australia, you must be an Australian resident and physically residing in the country at the time of your insolvency or you must own a home or business in Australia. The bankruptcy Australia filing process requires you to collaborate with a registered trustee to facilitate the process. There are legal forms you must file with AFSA, the government body that handles bankruptcy filings. The Bankruptcy Australia law requires the following forms:

• a debtor’s petition;
• a statement of offense; and
• an acknowledgement statement of being properly informed.

The process may require you to pay income contributions to service the bankruptcy process. The process may require also you sell certain assets you own such as property or a vehicle of a certain value and to provide the proceeds of your sale to your trustee. Further, the bankruptcy Australia law stipulates that when you initiate the process, you will remain bankrupt for three years and being overseen by your trustee through those years. In some cases, the bankruptcy period can take as long as five to eight years for you to be discharged from bankruptcy.

There are consequences, nonetheless, when you file for bankruptcy. Bankruptcy may have a negative effect on your occupation. You may also be prevented from holding various licenses and these could be a builder’s license, a real estate license, a liquor license, and a tax agent’s license.

Getting a Bankruptcy Attorney

Just so you are better informed about the ramifications of filing for bankruptcy, a bankruptcy attorney can help you explore any available options outside of bankruptcy. An attorney can also help you determine how you can possibly safeguard certain assets and property from the bankruptcy process if you so desire to go that route. Further, an attorney can guide you on which Chapter of the bankruptcy code is best for you – either Chapter 7, which is the “fresh start” chapter of the bankruptcy process; or Chapter 11, which most businesses find appropriate to recognize; or Chapter 13 bankruptcy. Therefore, to avoid all the confusion and any mistakes in the bankruptcy process, it is the smart thing to do to file for bankruptcy with the help of a licensed bankruptcy attorney.

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