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- January 10, 2017
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Any time individuals stress over Bankruptcy, they fret about how it will impact their day-to-day lives, and whether they will be able to retain their house, car, tools, and other essential possessions.
One of the ways that we can estimate this out is by utilizing the insolvency means test. It is something which we take our clients through to show them just how they may or may not be affected, and what Bankruptcy will signify to them.
Personal and household items
Your possessions are always going to be a key aspect of concern with Bankruptcy in Gladstone as there is often an irrational worry that someone will arrive to your property to swipe all your stuff away, repossess your couch, television, even the coffee machine. However this is never ever going to hold true with pure bankruptcy since typically they don’t care about these items. There are a few interesting exceptions although with Bankruptcy and belongings so if you have particular concerns about this make sure that you get some advice first or get in touch with us here at Bankruptcy Experts Gladstone on 1300 795 575.
With Bankruptcy you may be impacted if you have pricey tools. The rules explain that you may retain tools of trade up to a limit of $3,700. Having said that bear in mind that this is based upon ‘current cost’ so if you purchased your tools for $8,000 5 years before, they are likely to be worth far less right now. So it is worth taking into consideration what amount you would expect them to be worth, or how much you could get for them if you needed to sell them. But overall, the government does not want bankruptcy to become a barrier to you doing your job, so they don’t want to refuse you access to your tools. It is quite a great part of Bankruptcy, but sometimes might be confusing. So when it relates to tools of trade, you do not have to stress just contact us here at Bankruptcy Experts Gladstone for some advice.
People are constantly worried about just how Bankruptcy will impact their motor vehicle. So the rule is that you can keep one vehicle or motorcycle up to the 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 essentially put into the car, and just how much is on a car loan. If you have bought a car for $10,000 without a loan, then the car can potentially be sold for that amount, and $10,000 could be raised to pay off your bankruptcy debts. On the other hand, if you got a vehicle loan for that quantity instead then there would be no benefit to selling off your vehicle.
How do you value your car? Simplest method is to just have a chat to a used car dealer and ask how much they might give you for it– that will give you a rough idea about how your car will be impacted by this Bankruptcy procedure. Then you just need to consider the value of your auto loan or financing plan, and whether you are under or above the $7,600 threshold.
If your car is worth more than these threshold quantities get some help, at Bankruptcy Experts Gladstone we guide people work through their options when it relates to cars.
The Family Home
Much like with Bankruptcy and vehicles, the approach that can be taken to your home will certainly depend on equity. If there is no equity in the house, then there certainly is no use in forcing you to sell it. If there is no money to be made by taking the home from you, then they are hardly ever going to bother. As an example if you own a house worth $400,000 and you owe the bank $400,000 then more than likely you will have the ability to keep your house after bankruptcy.
The worst part about all of this though is that bankruptcy does not take into consideration feelings or excuses– you will not just be able to manage to keep your car or residence because you ‘need it’ or considering that you have a powerful emotional attachment. Bankruptcy may be cruel, but that is the reason why you need to make sure you speak to the right people. Don’t risk your family home by assuming or hoping you will have the capability to keep it post-bankruptcy just because you have to dwell somewhere.
If you are stressed out over your home or any other part of this Bankruptcy Means Test, then call us at Bankruptcy Experts Gladstone 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 a lot more information, www.bankruptcyexpertsgladstone.com.au.
We provide a Free- No Commitment Consultation so contact us today 1300 795 575.