If you cannot pay your debts, you may be considering bankruptcy, or an alternative to bankruptcy called a ‘debt agreement’. These are formal legal options available under the Bankruptcy Act 1966.
You can voluntarily become bankrupt by filing a debtor’s petition, or you may be forced into bankruptcy when a creditor files a creditor’s petition.
However, there are 5 serious consequences to going bankrupt which include that:
- Your bankruptcy stays on your credit report for five years and destroys your credit score so no one will lend you money for five years.
- Your name will appear on the public National Personal Insolvency Index permanently.
- A trustee will look after your affairs.
- You must ask your trustee for permission to travel overseas, and you can’t be a director of a company without court permission.
- You may not be able to work in certain trades or professions
Some people think that a debt agreement will be a better solution to bankruptcy when facing overwhelming debt. A debt agreement (also known as a Part IX debt agreement) is an agreement between you and some of your creditors.
But debt agreements also have very serious consequences, including destroying your credit file for 5 years and your name appearing on the National Personal Insolvency Index for 5 years. No lender will approve a loan when you have this information on your credit file.
The bottom line is that becoming bankrupt or entering a part 9 debt agreement means you lose control of your finances. There is also a stigma associated with being bankrupt and any future finance application you submit will require you to declare whether you have been bankrupted in the past.
But don’t despair, there is a much better way.
At Solve My Debt Now we work with your creditors to have your debts reduced or waived and your interest is frozen or waived. At the same time, we can also remove old black marks from your credit file. Using our solution, our aim for you is to avoid being added to the National Personal Insolvency Index, unlike if you go Bankrupt or enter into a Part 9 Debt Agreement.
You simply pay us a regular affordable amount and we do the work to get you debt-free.Call us now on 1300 070 672 or send us an email to email@example.com so we can provide you with the best solution to your current debt problem.
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