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Bankruptcy and debt law in Melbourne, Australia is part of the wider federal legislation that governs insolvent individuals and companies. This legislation is primarily made up of the Bankruptcy Act 1966 and the Corporations Act 2001. When an individual cannot pay their debts, they may choose to voluntarily petition for bankruptcy or their creditors may force them into bankruptcy. Companies unable to pay their debts may be placed into administration or liquidation.
Legal advice can be beneficial if you're struggling with debt, considering bankruptcy, or already filed for bankruptcy. Expertise in the intricate aspects of these laws can help you understand your rights, the implications of bankruptcy, and what alternatives might be available. A lawyer's guidance also becomes crucial if your creditors are suing you, or if you're dealing with complex situations like business insolvency or negotiating with creditors.
The Bankruptcy Act 1966 regulates personal insolvency. It allows for the declaration of bankruptcy, the drawing up of debt agreements, and personal insolvency agreements. Under bankruptcy, most of your debts are extinguished, but you may lose significant control over your assets and finances. The Corporations Act 2001 handles corporate insolvency, where companies may go into administration, receivership, or liquidation.
Generally, bankruptcy lasts for three years from the date it's declared, but it can be extended in certain circumstances.
It depends on your situation. If you have equity in your home, it could be sold to pay your debts. However, in some circumstances, it's possible to keep your home.
A debt agreement or a 'Part IX' is a binding agreement between you and your creditors to repay a proportion of your overall debt, rather than the full amount.
If a company becomes insolvent, it may be placed into administration, receivership, or liquidation, which could lead to the company's dissolution.
You're not prohibited from running a business while bankrupt, but certain restrictions apply, such as the need to disclose your bankruptcy when obtaining credit of above a certain amount.
Organizations such as the Australian Financial Security Authority, the Australian Securities and Investments Commission, and MoneySmart provide valuable resources and guidance when handling issues related to bankruptcy and debt.
If you're facing financial distress or considering bankruptcy, it's advisable to seek advice from a legal professional with specialised knowledge in bankruptcy and debt law. They can guide you through the process, help you understand your rights and obligations, and explore potential alternatives. Don't hesitate to seek help, it's a crucial step in making informed decisions about your financial future.
