Our Expert Solution for Bankruptcy Problems in Business
Before filing for bankruptcy, you should first seek expert financial advice and explore ways to repay your unmanageable debts. If you are unable to come up with any arrangements that satisfy the conditions put forward by your creditors, then you can consider yourself as being bankrupt and file for the same.
Meaning of Being Bankrupt
People find themselves in this precarious situation when their financial affairs have to be taken over by a trustee due to their inability to clear off debts. You might think that is not a good position to be in, but it can have some advantages as well. You need to understand both the disadvantages and advantages before making your decision.
Both businesses and individuals can file for bankruptcy. Companies have a different process for being declared bankrupt. They may enter into an external management agreement with their creditors for liquidation.
There are 2 ways in which individuals you can be declared bankrupt – you can file for it individually by submitting a debtors petition or one of your creditors can petition the court so that you can be declared bankrupt.
There is a uniform law that governs bankruptcy in Australia. Such cases are dealt by Federal Magistrates Courts and the Federal Court of Australia.
Viable Alternative
To avoid getting into this situation, some creditors may sometimes enter into a deed of arrangement so that the debtor can hand over management of financial matters to a trustee who will try to get a better return for the creditors.
This alternative can benefit the debtor because it sidesteps issues such as stigma, trauma, and the costs involved due to bad debt situation.
Debt Relief Services
Consumers who experience difficulties repaying debts can take advantage of valuable debt management services being offered by debt relief companies. These companies are actually mediators between debtors and creditors and help their clients to effectively handle or reduce the debts that they owe different creditors. They can help to simplify the process of repaying several debts. Of course, clients have to pay a fee to such services.
From the clients’ point of view, the move to hire the services of a professional debt relief company can be a smart one – it really simplifies their life, especially when they have to deal with all the stress associated with accumulated bad debt. The company would negotiate for better repayment terms and interest rates, besides actually managing the actual disbursement of monthly installments of payments to various creditors. It’s definitely better than defaulting on your payments or making late payments.
The services are a useful tool for those who have to face the stark reality of bankruptcy in Australia.
In the end, you could end up saving a lot of money especially if you carefully select a debt relief company. It definitely is worth giving thought to.
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