Whenever individuals worry about Bankruptcy, they think about just how it will impact their day-to-day lives, and whether they will be able to keep their house, car, tools, and other important belongings.
One of the ways that we can estimate this out is by utilizing the bankruptcy means test. It is something which we take our clients through to demonstrate to them how they may or may not be affected, and what Bankruptcy will mean to them.
Personal and household items
Your valuables are always going to be a key area of concern with Bankruptcy in Darwin because there is usually an illogical fear that someone will come out to your property to snatch all your stuff away, repossess your couch, television, even the coffee machine. However this is never ever going to be the case with pure bankruptcy because often they don’t care about these possessions. There are a few intriguing exemptions though with Bankruptcy and belongings so if you have particular concerns about this make certain that you get a bit of guidance first or call us here at Bankruptcy Experts Darwin on 1300 795 575.
With Bankruptcy you could be affected if you have costly tools. The rules explain that you may keep tools of trade up to a limit of $3,700. However remember that this is based upon ‘current cost’ therefore if you purchased your tools for $8,000 5 years before, they are likely to be worth far less nowadays. So it is worth taking into consideration just how much you would expect them to be worth, or how much you could receive for them if you had to sell them. But as a whole, the government doesn’t want insolvency to become a barrier to you working, so they don’t want to deny you accessibility to your tools. It is quite a good component of Bankruptcy, but sometimes might be confusing. Therefore when it relates to tools of trade, you don’t need to worry simply contact us here at Bankruptcy Experts Darwin for some suggestions.
People are constantly worried about how Bankruptcy will impact their vehicle. So the rule is that you can retain one vehicle or motorbike up to the market value of $7,600.
This takes into account current value, as well as the equity. What does this mean? Well, equity deals with the amount of money you have effectively put into the vehicle, and just how much is on a car loan. If you have purchased a car for $10,000 without having a loan, then the car can potentially be sold for that quantity, and $10,000 could be raised to pay off your bankruptcy liabilities. However, if you had a vehicle loan for that amount instead then there would be no benefits to selling off your motor vehicle.
How do you value your car? Easiest way is to simply have a chat to a used car dealer and inquire just how much they would offer you for it– that will give you a rough idea about how your car will be impacted by this Bankruptcy method. At that point you just have to think about the value of your car loan or financing plan, and whether you are below or above the $7,600 threshold.
If your car is worth more than these threshold quantities get some help, at Bankruptcy Experts Darwin we help individuals work through their choices when it relates to cars.
The Family Property
Similar to with Bankruptcy and cars, the approach that will be taken to your house will certainly depend on equity. If there is no equity in the house, then there certainly is no point in forcing you to sell it. If there is no funds to be made by taking the home off you, then they are almost never going to bother. For example if you possess a house worth $400,000 and you owe the financial institution $400,000 then more than likely you will be able to retain your residential property after bankruptcy.
The worst part about all this though is that bankruptcy does not take into account emotions or excuses– you will not just be able to always keep your vehicle or house because you ‘need it’ or because you have a strong emotional attachment. Bankruptcy can be cruel, but that is exactly why you will need to make sure you speak with the right people. Do not jeopardize your family home by assuming or wishing you will have the capability to keep it post-bankruptcy because you have to live somewhere.
If you are worried over your home or any other part of this Bankruptcy Means Test, then call us at Bankruptcy Experts Darwin on 1300 795 575 if you wish to know more about Bankruptcy and Houses or almost anything to do with Bankruptcy. We are here to really support you. Visit our website for even more information, www.bankruptcyexpertsdarwin.com.au.
We offer a Free- No Commitment Consultation so contact us today 1300 795 575.