What can I maintain when I’m Bankrupt – The bankruptcy means test.
Whenever people stress over Bankruptcy, they worry about just how it will impact their day-to-day lives, and if they will be able to retain their home, vehicle, tools, and other essential belongings.
Among the ways that we can work out this out is by utilizing the insolvency means test. It is something which we take our clients through to present to them exactly how they may or may not be impacted, and what Bankruptcy will mean to them.
Personal and household items
Your belongings are always going to be a crucial aspect of concern with Bankruptcy in Melbourne because there is normally an irrational concern that someone will come out to your property to swipe all your stuff away, repossess your couch, television, even the coffee machine. But this is never going to hold true with pure bankruptcy because often they don’t care about these items. There are a few interesting exemptions though with Bankruptcy and belongings so if you have particular concerns about this make certain that you get a bit of advice initially or contact us here at Bankruptcy Experts Melbourne on 1300 795 575.
With Bankruptcy you might be impacted if you have costly tools. The rules specify that you may keep tools of trade up to a limit of $3,700. However keep in mind that this is based upon ‘current cost’ so if you bought your tools for $8,000 5 years ago, they are likely to be worth far less nowadays. So it is worth considering just how much you would anticipate them to be valued at, or how much you could receive for all of them if you had to sell them. But as a whole, the government doesn’t want bankruptcy to be a barrier to you doing your job, so they don’t want to deny you accessibility to your equipment. It is quite a good part of Bankruptcy, but sometimes might be complex. Therefore when it relates to tools of trade, you don’t have to stress simply contact us here at Bankruptcy Experts Melbourne for some guidance.
Individuals are always concerned about how Bankruptcy will affect their motor vehicle. So the rule is that you can retain one car or motorcycle up to the market value of $7,600.
This takes into account current value, and also the equity. What does this mean? Well, equity deals with the amount of money you have effectively put into the automobile, and how much is on a loan. If you have bought a car for $10,000 without having a loan, then the car can likely be sold for that amount, and $10,000 can be raised to pay off your bankruptcy liabilities. However, if you had a car loan for that quantity instead then there would be no advantage to selling off your car.
How do you value your car? Easiest way is to simply have a chat to a second hand car dealer and inquire how much they would give you for it– that will present you a rough idea about how your car will be affected by this Bankruptcy method. Then you just need to take into consideration the value of your car loan or financing plan, and whether you are below or over the $7,600 threshold.
If your car is worth more than these threshold quantities get some assistance, at Bankruptcy Experts Melbourne we guide individuals work through their choices when it relates to cars.
The Family Home
Similar to with Bankruptcy and vehicles, the approach that can be taken to your residential property will depend on equity. When there is no equity in your house, then there certainly is no purpose in forcing you to sell it. If there is zero funds to be made by taking the home from you, then they are seldom going to bother. As an example if you own a house worth $400,000 and you owe the financial institution $400,000 then more than likely you will be able to retain your house after insolvency.
The worst part about all of this though is that bankruptcy does not take into account emotions or justifications– you will not just be able to keep your car or residence because you ‘need it’ or considering that you have a strong emotional attachment. Bankruptcy can be harsh, but that is why you need to make sure you talk to the right people. Don’t risk your family home by assuming or hoping you will have the ability to keep it post-bankruptcy because you need to live somewhere.
If you are worried over your home or any other aspect of this Bankruptcy Means Test, then call us at Bankruptcy Experts Melbourne 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 assist you. Visit our website for a lot more information, www.bankruptcyexpertsmelbourne.com.au.
We offer a Free- No Commitment Consultation so call us today 1300 795 575.