What can I maintain when I’m Bankrupt – The bankruptcy means test.
Whenever people worry about Bankruptcy, they think about just how it will impact their day-to-day lives, and whether they will be able to retain their home, car, tools, and other important belongings.
One of the ways that we can work out this out is by using the insolvency means test. It is something that 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 possessions are always going to be a crucial aspect of concern with Bankruptcy in Joondalup since there is usually an unreasonable concern that someone will come along to your house to snatch all your stuff away, repossess your couch, television, even the coffee machine. However this is never going to hold true with pure insolvency because typically they don’t care about these valuables. There are a few interesting exemptions although with Bankruptcy and belongings so if you have specific worries about this make sure that you get a bit of advice first or contact us here at Bankruptcy Experts Joondalup on 1300 795 575.
With Bankruptcy you might be affected if you have costly tools. The guidelines specify that you may retain tools of trade up to a limit of $3,700. However bear in mind that this is founded upon ‘current cost’ so if you bought your tools for $8,000 5 years before, they are most likely to be worth far less right now. So it is worth taking into consideration how much you would anticipate them to be worth, or how much you could obtain for them if you had to sell them. But overall, the government doesn’t want insolvency to be a barrier to you doing your job, so they do not want to deny you accessibility to your equipment. It is quite a great part of Bankruptcy, but sometimes can be confusing. So when it relates to tools of trade, you really don’t need to stress just call us here at Bankruptcy Experts Joondalup for some advice.
People are constantly worried about how Bankruptcy will affect their motor vehicle. So the guideline is that you can easily keep one car or motorbike up to the market value of $7,600.
This takes into consideration present value, and also the equity. What does this mean? Well, equity deals with the sum of money you have actually put into the car, and how much is on a car loan. If you have bought a car for $10,000 without a loan, then the car can likely be sold for that amount, and $10,000 can be raised to pay off your bankruptcy debts. Having said that, if you had a vehicle loan for that quantity instead then there would be no benefits to selling off your car.
How do you value your car? Easiest method is to simply have a chat to a second hand car dealership and inquire how much they might offer you for it– that will certainly provide you a rough idea regarding how your car will be affected by this Bankruptcy method. Then you just have to think about the value of your car loan or financing plan, and whether you are under or above the $7,600 threshold.
If your car is worth greater than these threshold quantities get some help, at Bankruptcy Experts Joondalup we guide individuals work through their possibilities when it relates to cars.
The Family Property
Similar to with Bankruptcy and motor vehicles, the approach that will be taken to your house will certainly be dependent upon equity. When there is no equity in the house, then there certainly is no use in forcing you to sell it. If there is zero funds to be made by taking the home off you, then they are hardly ever going to bother. For example if you possess a home worth $400,000 and you owe the financial institution $400,000 then more than likely you will have the chance to retain your residential property after insolvency.
The worst part about all of this though is that insolvency does not think about emotions or excuses– you will not just have the ability to manage to keep your vehicle or residence because you ‘need it’ or because you have a strong emotional attachment. Bankruptcy may be cruel, but that is why you should ensure you talk to the right people. Don’t risk your family home by presuming or wishing you will have the ability to maintain it post-bankruptcy just because you have to live somewhere.
If you are worried over your house or any other part of this Bankruptcy Means Test, then call us at Bankruptcy Experts Joondalup on 1300 795 575 if you want to know more about Bankruptcy and Houses or almost anything to do with Bankruptcy. We are here to truly support you. Visit our website for much more information, www.bankruptcyexpertsjoondalup.com.au.
We provide a Free- No Commitment Consultation so contact us today 1300 795 575.