The number of people declaring Bankruptcy each year is on the decline in Australia. In the 2021-22 Financial Year:
The fall in Bankruptcy cases in Australia seems to be related to the rise in Part 9 Debt Agreements across all states and territories. However, declaring Bankruptcy still has its place in Australia.
Despite its reputation, Bankruptcy is not a punishment. Bankruptcy is a way to alleviate severe financial hardship whilst keeping your creditors happy. It involves a number of regulations which may place restrictions on your life. There are regulations for your assets, income and even overseas travel. However, you may find your situation falls short of these regulations, so your life may not be impacted at all. For instance:
If you are struggling to make contributions towards your debt and maintain your everyday living expenses, declaring Bankruptcy may be the best option for you.
The obligations and restrictions which come hand in hand with declaring Bankruptcy can have a very serious impact on your lifestyle. You must consider all of your options before you decide to play the Bankruptcy card. Debt Agreements were introduced nearly two decades ago and were created as an alternative to bankruptcy. In the 2021-22 financial year, more than 4,000 Australians used a Debt Agreement as a solution to their debts. A Debt Agreement is a contract between you and your creditors outlining a new repayment arrangement you can afford.
Often, you will only need to repay a small percentage of your original debt while all future interest and fees are paused. Entering a Debt Agreement is still an act of Bankruptcy, however, it doesn’t come with the long list of restrictions and obligations associated with bankruptcy.
Declaring Bankruptcy in Australia is a simple enough process. Revive Financial is here to help, by advising your creditors that you don’t have enough income or value in assets to cover the debts you owe.
In Australia, the term of your Bankruptcy will generally last for three years. For those three years, you will face restrictions on your income, assets, ability to borrow money, employment and overseas. Once your Bankruptcy has ended, it will be noted on your credit file for at least a further 2 years, noting you as a discharged bankrupt. As a discharged bankrupt, you will be able to do everything a person with a good credit file would be. However, you may find it difficult going through mainstream financial lenders. For example, if you apply for a loan, a traditional bank might take your bankruptcy into account and refuse your application.
It is still possible to borrow money through non-conforming lenders who base their approval on a different set of criteria. Companies like Revive Financial can find competitive loans for people with bad credit ratings, have entered into a debt agreement and discharged bankrupts. For details about the obligations and restrictions involved with declaring bankruptcy, check out our blog post – 5 Reasons to Avoid Bankruptcy.
To be 100% sure that declaring Bankruptcy is the right option for you, call Revive Financial on 1800 534 534 and discuss your situation with one of our experienced Case Managers. We will speak to you about your financial situation and recommend the best course of action for you.
Revive Financial can guide you through the Bankruptcy process and ensure it is completed correctly. We will answer any questions you have along the way and ensure the entire experience is quick and free from stress. Alternatively, we may be able to recommend a different debt relief solution for you. If you are considering declaring bankruptcy in Australia, talk to Revive Financial today.
For more information on Bankruptcy, check out our Bankruptcy page here.