For a creditor to make a person bankrupt it can cost them over $3,000- to do so, so for small debts they normally don’t bother doing it.
For a person to make themselves bankrupt, it can cost anywhere over $2,000-, so for small debts it is not worth doing.
You will find that Debt Collection companies normally buy bad debts from lenders etc for a discount, sometimes around 10% of the actual debt, so for a $10,000 debt a debt collection company might pay $1,000- for it. The lender then writes the debt off and the collection company makes their money by hastleing the debtor to pay, and if they manage to get the debtor to pay well above the $1,000- they paid for it, they make money.
Most debt collection companies break laws when trying to get debtors to pay.
They cannot threaten the debtor with bankruptcy or by saying the sheriff wil come around and take all your poccessions etc. They can only ring between certain hours. I think off hand between 8am & 8 pm. They should not ring you at your workplace and I think they are only allowed to call you 3 times in any week. You can also request that you do not want any phonecalls and any correspondance to you must be in writing. To do this you must send them a letter requesting it.If you are taken to court by the credtor or debt collection company, a court can only issue a warrant for a redirection of earnings (money to be taken from your income to repay the debts) if it is satisfied of the following:-
You are employed
You can pay necessary expenses
You can pay other known liabilities
There is no unreasonable hardship and
There are no other, more appropiate enforcement means.State Manager
Wholesale Mortgage Lender that deals only with brokers.
20 years in Finance Industry
Thats really interesting info – I learnt a few things there!
Thanks mate
Simon Macks
Finance Broker
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Information sheet on Bankruptcy.
BANKRUPTCY
Bankruptcy has very serious consequences for the rest of you life. Do not take this step without speaking to a Financial Councilor to see if there are other options available to you. If you are in debt and are considering bankruptcy, you should know bankruptcy is your last resort. Once bankrupt it is difficult and expensive to undo if you change your mind.
WHAT IS BANKRUPTCY?
Bankruptcy is a process where people, who cannot pay their debts or come to a satisfactory arrangement with their creditors, receive the protection of the Bankruptcy Act, 1966. Its purpose is to provide an orderly finalization of the financial affairs of people who are unable to pay their debts.
WHY GO BANKRUPT?
Bankruptcy protects your essential assets and income, and stops your creditors from hounding you. It releases you from your debts ensuring that you have no further obligations to your creditors. By becoming bankrupt, you enable your creditors to claim under their debt insurance policies.
HOW DO I BECOME BANKRUPT?
You can become bankrupt voluntarily or you can become bankrupt on the actions of creditors.
You can apply to be made bankrupt by completing both a Debtor’s Petition and a Declaration of Financial Position, known as a statement of affairs and lodge them with a Bankruptcy Trustee.
WILL I LOSE EVERYTHING?
Bankruptcy actually protects essential assets and income.
The following property cannot be given to creditors:
• Necessary apparel and household items, including furnishings.
• Interest in a motor vehicle to a market value of $5,650 per person.
• Tools of trade to a maximum re-sale value of $$2,900.
• Life assurance or endowment policies. (subject to some limitations)
• Superannuation payments (subject to certain limitations).
• Certain damages and compensation payments.Property subject to securities, for example land under mortgage, car under a Bill of sale, are also unlikely to be available f there is little or no value in them allowing for the payout of the security.
The Trustee will determine what is “necessary†but it is certain that collectables, artworks, antiques, etc, will be sold for the benefit of creditors.
Bankruptcy has very serious consequences for the rest of you life. Do not take this step without speaking to a Financial Councilor to see if there are other options available to you. If you are in debt and are considering bankruptcy, you should know bankruptcy is your last resort. Once bankrupt it is difficult and expensive to undo if you change your mind.
State Manager
Wholesale Mortgage Lender that deals only with brokers.
20 years in Finance Industry
Cant the Debt Collection Agency or even you as a citizen attend the courts and get a “warrant of execution” for under $100 and serve the document on the individual, so beginning the legal journey to recover your debts?
“Money is a currency, like electricity and it requires momentum to make it Effective”
Count The Currency With This Online Positive Cashflow CalculatorHi
I am actually suing a person at the moment, in NSW.
Once you have a court judgement against a person, you can do a number of things including:
– Obtaining a writ of execution and sending the sheriff around to seize personal property which can be sold
– Garnish their wages. A certain amount must be left for living expenses, and then the rest can be taken
– Examination summons. They can be ordered into court to give a listing of their assets ans liablities and income etc
– obtain a writ against land, to force the saleIf they still don’t pay up, then the creditor can file a notice of bankruptcy. If they do not comply within 21 days, they can then be bankrupted.
Terryw
Discover Home Loans
Mortgage Broker
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Most debt collection companies break laws when trying to get debtors to pay.As a Commercial Agent I should take offence to this. Those of reputation comply with the legislation to ensure that any collection work is done within the parameteres of the legal requirements. My business and all of those with whom I have had an association work strictly within the guidelines, use the court system to recover the debt and if an individual is bankrupted it is as a result of either their money mismanagement or thier attitude when it comes to trying to solve their problems. EVERY debtor my business talks to is approached on a conciliatory basis. It is only when the debtor refuses or fails to comply that the court system then becomes involved and only on instruction from the client.
They cannot threaten the debtor with bankruptcy or by saying the sheriff wil come around and take all your poccessions etc.
If you have a judgment then of course a creditor or his agent can and SHOULD advise the debtor that Bankruptcy is a possibility and the issue of a warrant of seizure and sale is an option. THAT IS the law
You will find that Debt Collection companies normally buy bad debts from lenders etc for a discountThat is a commercial decison by the lender. I do not know of any agencies that “normally’ do this. In Queensland there are some businesses seperate to collection agents that buy debts but there are varying terms and conditions.
A final note. Laws relating to debt recovery vary state to state. Talk to a reputable Commercial Agent (licensed in most states) and get the facts about debt recovery in your state. Talk to the Office of Fair Trading in your state if you are being unfaily hassled by a collection agent.
Don’t listen to stories-get the facts!!
markk
Happy Hunting
http://www.kentscollections.com
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