The bankruptcy option explained

The Bankruptcy Act exists to provide a legitimate humane solution for people who can’t pay their debts, whether those are business or personal.

Thousands of perfectly ‘ordinary’ people choose to utilise bankruptcy. You don’t need to be in business to declare yourself bankrupt.

Debt can be caused by a relationship breakdown, unemployment or under-employment, sickness, a business failure, debt as the result of a personal guarantee, an act of nature, structural change within an industry, and – whether you will admit it or not – sometimes by too much personal spending.

There are other reasons but these are the most common reasons that I see. The main thing to know is that a bankruptcy claim works the same way, no matter what the reason.

If you would like to talk to me about bankruptcy and where it sits with you, please call me on 1300 060 122 or send me an email at alan@nichollsco.com.au Also, save my website www.nichollsco.com.au so you can come back and read much more, and not just about bankruptcy.

Sometimes there is confusion about companies going ‘bankrupt’. Only individuals can claim bankruptcy. There is a different set of laws and procedures when companies cannot pay their debts. They mostly go into liquidation.

If a director has signed a personal guarantee and later cannot honour that guarantee, the debt will be cancelled on the bankruptcy of that director, and so life can go on.

How does a person become bankrupt?

To obtain the protection of bankruptcy, you must fill out two forms – a Debtor’s Petition and a Statement of Affairs. If you are comfortable about correctly filling in these forms, they can be downloaded from www.afsa.gov.au They can also be accessed HERE.

If you would like me to be your trustee, email your completed forms to me (at alan@nichollsco.com.au). I will attach my consent form and lodge the documents with the Australian Financial Security Authority for you to gain the protection of bankruptcy with me as your trustee.

Alan Nicholls’ no obligation help desk

Nicholls & Co provide a free, no obligation ‘help desk’ for people considering bankruptcy – we discuss and explain bankruptcy and answer questions for anyone who is considering bankruptcy. The Nicholls & Co help desk can be accessed by phone (1300 060 122) or helpdesk@nichollsco.com.au . Alan Nicholls, Registered Trustee in Bankruptcy is also available to answer your questions to enable you to decide if bankruptcy is right for you.