The key to having a good credit record is to pay your bills on time. However, not everyone lives in a perfect world and it isn’t always possible to pay your bills on time. In fact we find that many people sink into debt over a period of time and don’t realise the significance of the problem until they can’t meet the minimum payments due on their debts each month. If you find yourself in this situation, then you are probably insolvent and you should seek professional assistance now.
If you are insolvent, you would be wise to consider a formal arrangement with your creditors. A formal arrangement with your creditors will be recorded on your credit file for 7 years, however, the government has recently introduced new laws which will become effective in 2014, which will force the credit reporting agencies to remove the listing from your credit file when you successfully complete your agreement. The average formal arrangement only lasts for between 3 to 5 years, so if all goes well your credit file could be clean within 3 to 5 years. More importantly you will become debt free as well!
If you have a poor credit record and a bundle of unpaid debts then call our personal debt consultants on 1800 676 598 to arrange a free debt assessment.

It is very important that you be aware of offences in bankruptcy. Some bankruptcy offences can lead to prosecution and imprisonment or fines.
It’s important to know what counts as an offence in bankruptcy. Below is a list of the more common bankruptcy offences:

• makes a false statement in an affidavit (Sec 263A of the Bankruptcy Act).
• a creditor proving a false voting document or proof of debt (Sec 263C of the Bankruptcy Act).
• fails to attend a public examination (Sec 264A of the Bankruptcy Act).
• refuses to answer a question at a public examination (Sec 264C of the Bankruptcy Act).
• fails to provide information relating to property (Sec 265 (a) of the Bankruptcy Act).
• fails to disclose information relating to property disposed of 2 years prior to bankruptcy (Sec 265(b) of the Bankruptcy Act).
• fails to deliver up books and records as requested (Sec 265(c) of the Bankruptcy Act).
• fails to provide any information about the examinable affairs (Sec 265(ca) of the Bankruptcy Act).
• fails or refuses to tell where the books and records relating to the examinable affairs (Sec 265(d) of the Bankruptcy Act).
• fails to inform the trustee in bankruptcy if the bankrupt knows that a proof of debt filed by a creditors is false (Sec 265(g) of the Bankruptcy Act).
• fails to provide a full explanation in the loss or depreciation of assets within 2 years of bankruptcy (Sec 265(h) of the Bankruptcy Act).
• conceals a debt or asset (Sec 265(4)(a)&(b) of the Bankruptcy Act).
• conceals, destroys or falsifies books and records (Sec 265(4)(c) of the Bankruptcy Act).
• grants security over assets that were purchased on credit when and remain unpaid for (Sec 265(4)(e) of the Bankruptcy Act).
• obtains property by fraud (Sec 265(5) of the Bankruptcy Act).
• fails to deal with Trustee in Bankruptcy notice issued under Sec 77 (Sec 265A of the Bankruptcy Act) or provides misleading response.
• provides a false declaration (Sec 267 of the Bankruptcy Act)

Your trustee will report any of these offences to AFSA.  Once reported to AFSA, they may prepare a prosecution referral to the Director of Public Prosecutions and if the offence carries a prison sentence you could be imprisoned..

Did you know that, if you’re in debt, there is a way to pay it off as one loan instead of many little ones? It’s called Debt Consolidation.
There are many ways of doing this, but the principle is always the same.
Being in debt is a very stressful and tricky process. You must keep up with monthly payments, and if you miss any there are strict consequences. These consequences lead you into more debt and owing more fees than you initially had. This can go on and on, until you are in so much debt you think your head might explode!
That is why debt consolidation is such an appealing option for getting out of that debt spiral. It puts all of your individual payments into one big payment. This may seem slightly scary, but causes those little consequences that debt has, to almost go away and can help you budget and know exactly what you owe.
With some professional advice and planning, consolidating your debts is sounding like the best way to go. As always there are several processes to go through so speak to a financial service company that specializes in getting people out of debt so you know more.   

If you go bankrupt, you will still be able to keep some assets.  The government’s policy is if you go bankrupt, you must be allowed to survive and still maintain a minimum level of comfort.  The aim is not to have you live on the streets and with that policy in mind the government has protected certain assets in bankruptcy (up to the specified limits):

• Car – You can keep a car worth up to $7,350. If your car exceeds that value you will need to surrender it to your trustee in bankruptcy. The trustee will then sell the car and remit the $7,350 to you so that you can buy a cheaper car. The excess will be kept by your trustee and will be paid into your bankrupt estate.
• Income – You can keep your wage up to $967.92 p.w. (after tax).  If you exceed this amount and have no dependents you will have to make statutory income contributions to your trustee in bankruptcy.
• Tools of Trade – if you are dependent on tools to earn a living (ie a tradesman) then you are allowed to keep tools worth up to $3,600.
• Household Furniture – You are able to keep necessary household furniture and personal possessions as well as educational and sporting equipment.
• Sentimental Items – Item of sentimental value must be declared to your Trustee and they can only be kept if the creditors approve it.
• Superannuation – most superannuation funds are protected but only if it is a complying fund and you haven’t paid any excessive contributions into the fund prior to bankruptcy. Excessive contributions prior to bankruptcy can be clawed back.

If you are considering bankruptcy, you should also carefully consider the restrictions which will be placed on you. Before declaring yourself bankrupt, make sure you speak to a personal debt advisor. We offer a free debt assessment for all people considering bankruptcy, so call today on 1800 676 598.