A person can become bankrupt by making application (Debtor’s Petition) or by a creditor applying to the Court for the Court to make an Order (Sequestration Order) that the person be made bankrupt (Creditor’s Petition).
We recommend that you make your own application for bankruptcy as doing so has a number of positive advantages. These advantages include:
- A Debtor’s Petition will give a more timely resolution to your financial problems.
- Stress levels will normally be lower if you are making the decision rather than waiting to see what timeframe someone else will decide for you.
- Once you have recognised the need for bankruptcy to resolve your financial problems – the sooner you can gain the protection of bankruptcy – the sooner you can push on with your life. You will have drawn the line in the sand – have certainty – and start going to work each day with your wages protected for you and your family.
- Once you have the protection of bankruptcy, the phone calls from creditors will stop.
- Creditors are not subject to a strict timeframe – they can make application for your bankruptcy at any time within the statute of limitations. If the creditor does not pursue timely action, this can result in your financial problems lingering for many years.
- You must owe a creditor more than $5,000 (subject to CPI adjustment) before the creditor can petition for your bankruptcy.
- If you apply for bankruptcy you are able to ask a Trustee to be the Trustee of your bankrupt estate. You do not have this option for a Creditor’s Petition.
- Creditors also have the benefit of knowing where they stand and do not waste money trying to collect a debt that is not collectable.
- The creditor is able to talk to the Trustee’s office to find out where they stand and to find out whether they should write off their debt or what percentage is likely to be recovered.
- The creditor does not incur the cost of making application to the Court for your bankruptcy.
- A Debtor’s Petition provides the best outcome for all parties.
Further and more detailed information on ways you can become bankrupt can be obtained from this website or by calling Alan Nicholls on 1300 676 998