CRA Options Booklet

7/31/2019 CRA Options Booklet

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DISCLAIMER

The inormation contained in this booklet has been developed as a guide or individualsexperiencing diculty with debt and credit issues. The ollowing inormation should in noway be considered advice. Beore anyone decides on a specic option they should alwaysseek independent advice rom a nancial advisor, counsellor, government body and/or solicitor. Credit Repair Australia and its associated entities are not nancial advisors,

counsellors, solicitors and are not aliated with the government outside their requirements

by law. Furthermore Credit Repair Australia does not guarantee the accuracy o the ollowinginormation and do not claim that it is ree rom inaccuracies or mistakes.

This booklet and all inormation contained within is copyright to Credit Repair AustraliaPty Ltd. All rights reserved. ACN: 120 248 311. The redistribution, copy, reproduction orun-authorised use o this booklet, its material and/or content is not permitted without priorwritten consent.


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Credit Repair Australia is the countries oldest, largest and most successulcompany who specialise in both past and current credit problems. Sincewe began we have assisted more than 25,000 people with debt and creditissues. Our options range rom alternatives to bankruptcy through tocredit report improvements.

This booklet has been designed as a guide to a number o options orpeople experiencing diculties with debt and credit issues. Ater readingthis booklet i you have any questions please eel ree to contact yourconsultant or call our head oce on 1300 304 352.

Contents

Credit Repair............................................................................................. 4

Inormal OptionsCreditor Negotiations......................................................................... 8Debt Settlements.................................................................................. 8Creditor Moratorium........................................................................... 8

Formal OptionsDebt Agreement (Part 9).................................................................. 10Personal Insolvency Agreement (PIA)...................................... 16Bankruptcy................................................................................................ 20

Who to contact...................................................................................... 27


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Otherwise known as a Credit Report Improvement (CRI), Credit Repair isthe removal o unair, disputable & contestable listings rom credit reports.

When you apply or any type o credit, your credit report is almost alwayschecked. Your credit report is a basic history o your past nancial activityand is one o the main actors in determining whether or not you getapproved or credit.

A credit report generally contains inormation such as; addresses,employment history, current employment, credit applications, deaults(overdue accounts), court judgments, clear-outs, crossed or linked les,name changes and bankruptcies etc.

When you make these enquiries or applications or credit, even a mobilephone on a contract or apply or an interest ree store ofer, chances areyour details have been given to a credit reporting agency.

These unair, disputable and contestable listings do happen, and they maybe legally removed.

The benets o credit repair include:

Removing negative listings can result in instant credit approval

Reducing interest rates Reducing up ront and ongoing ees Reducing repayments Saving thousands

Unair, disputable and contestable inormation that may be removed romyour credit report include:

Overdue accounts Deaults Court listings Judgments Clearouts Crossed or linked les (cross reerences & possible matches) Multiple identities More

CreditRepair


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TheCreditRepairProcess

The time it takes to complete this process varies case by case and isdetermined by accurate and prompt inormation being received rom you,the credit providers and other relevant organisations.

5

Consultant completesdocs & orwards to the

oce

Oce conrms detailssent in by your consultant

with you

Your case manager isappointed

Your case managerprepares your case to

the credit provider, creditreporting agency & other

relevant organisations

Credit provider or relevantorganisation evaluates

correspondence anddecides whether or not tocomply with the request

to remove item/s

Credit ReportImprovement team

receives a response romthe credit provider orrelevant organisation

You are notied o theresponse, i it is positivethe items are removed

and you may be ree toobtain nance

I the response is negative,your case is reviewed

and may be resubmitted

to the credit provider orrelevant organisations

You may also have urtheroptions in regards topotential legal action


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FrequentlyAskedQuestions

What is a credit report?A creditor report containsinormation about who you areand a history o your nancialbehaviour. In many cases the creditreport is the basis o evaluatingyour credit rating or determiningyour credit worthiness.

What is in a credit report?Each report usually consists oyour name, address, employmenthistory, date o birth, a list ocreditors who have viewed thereport, any late payments, deaultsor judgments, clear-outs, crossedor linked les, name changes andbankruptcies etc.

Do I have a credit report?There are over 14 million creditreports held in Australia. Chances

are you have a credit report i youhave ever applied or or enquiredabout any nancial product, mobilephone contract, store credit card,

credit card.

How did I get this report?When you make any enquiry orapplication or credit, you may haveconsented or the credit providerto give your details to a creditreporting agency.

How does my credit report efectme?Every time you apply or credit, orwhen you are late paying a bill, itall goes on your credit report. I

you have deaults (late payments)or other negative notes on your

le you may be considered a badcredit risk, even i they have beenpaid. Thereore you may pay ahigher interest rate or you may bereused credit altogether.

How much bad credit does it taketo be declined?As you may have alreadyexperienced, even one smalllate payment listing, may resultin credit reusals. Any negativecredit whatsoever can become asubstantial credit obstacle even i

you have paid the account.Does paying the debt x my creditrating?When you pay a debt, the listingis not removed rom your creditreport, it may only be updated to apaid status.

How do you remove these listings

rom my credit report?Credit Repair Australia negotiateswith credit providers and creditreporting agencies based on yourrights under diferent areas olaw, in order to have the listingsremoved.

Do you provide a guarantee?

No, however we have anadministration and a success ee.

The success ee is only paid i weare successul in improving yourcredit report.

Are you lawyers or nancialadvisors?No, we are not nancial advisors,

lawyers or solicitors.


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How long does it take?It is inappropriate or anyone topromise a particular time rame.I credit inormation is receivedpromptly, many clients see

completion o the process within35 working days. However, this isnot a guide as to how long yourcase will take. Your results maydifer depending on your situation.

Have you been very successul withthis process?We are Australias most successulcredit repair company, we havehelped remove over 3,000 negative

credit listings.

CaseStudy-CreditRepair

Damien and Julia Kent were told by their nance broker that because o a

deault listing on Damiens credit report, their application or a home loanwith their bank had been declined.

The nance broker gave Damien and Julia the option to get their homeloan with a non-conorming lender with an interest rate around 3% peryear above what they would have been paying with their bank.

Damien and Julia did some calculations and realised that paying 3% peryear more in interest meant they would be paying an extra $8,230 per year.

The Solution

Damien and Julia came to Credit Repair Australia to gure out theiroptions. Credit Repair Australia ound out that Damiens deault was listedunairly, a case was prepared and submitted to the credit provider thatlisted the deault, the deault was removed rom Damiens credit report.

The Outcome

Damien and Julia returned to their nance broker with an improved

credit report. The broker reprocessed their loan with their bank and it wasapproved. In this example Damien and Julia are now saving an estimated$8,230 every year in interest which equals a total saving o $246,000 overthe lie o their home loan.


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An inormal arrangement is a way o negotiating with your creditorsin order to reach a desired outcome. The ollowing are some optionsavailable under inormal arrangements, however, it is important to

remember that inormal arrangements are generally less successulthen ormal arrangements.

CreditorNegotiations

There are circumstances where Credit Repair Australia can negotiate with

your creditors on your behal. This negotiation could possibly:

Reduce your interest rates

Pay less than the ull amount to nalise the debt Provide a pause or moratorium on payments

DebtSettlements

A Debt Settlement is a type o Creditor Negotiation where you ofer yourcreditors a lump sum or ull and nal settlement o a debt, this lump sumcould be less than the ull amount that you owe. When attempting a debtsettlement it is important to remember:

You must be insolvent or unable to pay the ull amount The lump sum must come rom a third party (amily or riends) Debt Settlements are rarely efective with more than one creditor

You must be insolvent or unable to pay the ull amount in order topropose a debt settlement, otherwise your creditors may not see thevalue in settling your debt. I the lump sum was to come rom yoursel,you would have normally already put it towards the account to satisyyour obligations, thereore it may come rom amily or riends.

CreditorMoratorium

Creditor Moratorium is a type o Creditor Negotiation where we attemptto negotiate with your credit providers to put a hold on your repaymentsor up to 3 months. I you enter a Creditor Moratorium it is important toalso establish a plan to deal with the debt so you can resolve it or good.

This plan might consist o a ormal or inormal option.

InformalOptions


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CaseStudy-DebtSettlement

Nadine Seymor was nding it harder and harder to repay her creditcard bill which was $25,270. Nadine asked the bank i she could have anextension on her repayments, the bank gave her one month to catchup on her bills and start paying of the rest o her credit card. The monthpassed and Nadine still wasnt able to meet the repayments on the card.Nadine told her parents about the trouble she is having and they told herthey could give her some money to put towards her credit card, howeverthey could not aford to pay the whole amount.

The SolutionCredit Repair Australia reviewed Nadines nancial position and outlinedher options, Nadine decided to go ahead with a Debt Settlement. Credit

Repair Australia prepared a proposal and started negotiations with thebank. Ater a ew weeks the bank responded and said that they wouldaccept around $8,000 to settle Nadines outstanding credit card balance.

The Outcome

Nadine borrowed $8,000 rom her parents and paid it to the bank to settlethe whole credit card balance o $25,270. Nadine cancelled the card andshe never paid any more on the account.


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Formal options are a way o dealing with a number o creditors andnding a long term sustainable solution. Formal arrangements are otenmore successul than inormal arrangements. The ollowing are some

ormal options that may be available to you.

DebtAgreement(PartIX)

A Debt Agreement, otherwise known as a Part IX (or Part 9) is a ormal,legally binding arrangement with your unsecured creditors. This meansthat once a Debt Agreement is accepted all o the unsecured creditorsincluded in the agreement can not take any action against you outside theterms o your proposal. A Debt Agreement has the ability to:

Protect your assets rom repossession Release you rom your debts (once the agreement has been met) Let you make afordable repayments on your debt May allow you to pay less than the ull amount o the debt

You are eligible to propose a Debt Agreement i:

You are insolvent (unable to pay your debts when they are due) Your ater tax income does not exceed a set limit (threshold).

Your total unsecured debt does not exceed a set limit (threshold).

You have not been party to a debt agreement (part IX), a personalinsolvency arrangement/part X or been bankrupt in the past 10years rom the date you were discharged.

HowItWorks

FormalOptions

You make

afordablepayments to your

Administrator (either

weekly or ortnightly)

Your Administratorpays your creditors

listed in theagreement rom

unds that you agreeto pay

YOU YOURADMINISTRATOR

YOUR CREDITORS


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DebtAgreementProcess

The time taken to complete steps 1.1 to 2.2 is approximately 50 to 55 days,however each case varies. Once accepted, the time taken to completeyour debt agreement is dependent on the term you put in the proposal.

1.1 Administratorchecks ino, prepares

documents andsends to you or

signing

1.2 Once youvechecked and signedthe documents, send

them back to the

oce

1.3 Administratorsends the

documents to the

Insolvency andTrustee Service o

Australia (ITSA)

1.4 I accepted byITSA or processing,

they orward to

creditors to vote onthe proposal

2.1 O the creditorswho vote, i those

with more than 50%in dollar value vote

yes, it is accepted

2.2 All o thecreditors that you

listed in the proposalare now legally

bound by your ofer,even i they didntvote or voted no

2.3 You continueto pay your

administrator whothen pays your

creditors or you

2.4 Once you havemet the terms o

your proposal youare now released

rom all o thosedebts

3.1 O the creditors

who vote, i thosewith 50% or more

o the total value oyour debt, vote no, it

is not accepted

3.2 Your Situation willbe reviewed

3.3 Your DebtAgreement proposalmay be resubmittedwith some changes

3.4 Your creditorsvote again. I the

proposal is rejectedor a second time,

Credit RepairAustralia may

propose a diferentoption

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What is a Debt Agreement or PartIX (9)?A Debt Agreement otherwiseknown as a Part IX (9), is a simpleway to come to an afordablearrangement with your unsecuredcreditors which is legally bindingand will, i your creditors accept it,and you complete your obligations,release you rom that unsecureddebt.

What does insolvent mean?You are technically insolvent iyou cant pay all your debts as andwhen they all due.

Is it the same as Bankruptcy?A Debt Agreement is an alternativeto Bankruptcy. However, bysubmitting a debt agreementproposal you are committing anact o Bankruptcy. I the proposalis not accepted by creditors, acreditor can use this to apply to thecourt to make you Bankrupt.

What are the benets?A Debt Agreement enables you topropose afordable payments overa period o time, even i they equalless than the ull amount that youowe. Debt Agreements also havethe ability to pause all interest andprotect you rom any action whilstthe arrangement is in place oronce its completed. Also your DebtAgreement administrator cantalk to your creditors or you,

thereore stopping all the harassingphone calls. Debt Agreementsdont have the same restrictions

as bankruptcy does (e.g. travelrestrictions and restrictions on whatyou can own/keep).

What is provable unsecured debt?Your provable unsecured debt is

the only debt that you are able toput into your Debt Agreement.Examples o unsecured debtinclude medical and phone bills,credit card debt, personal loans andthe shortall rom secured debts.

Do all creditors have to agree to myproposal?

No, not all creditors have to agree. Ithe majority in dollar value, o thosewho decide to vote, vote yes, thenyour proposal is accepted and allcreditors in the proposal are boundby it. This includes the creditorswho didnt vote or even voted

no.

Can you guarantee that it will beaccepted?No, it would be unproessional tomake such a guarantee. It is yourcreditors who decide whetherthey accept or reject your proposalbased on how much you can ofer.

Whats the best way to get my

proposal accepted?Your responsibility is to make ulland complete disclosure o yournancial position, put orward thebest ofer you can and committo complying with the terms o theagreement. This is the best way toensure you are doing everythingyou can or your agreement to beaccepted.


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How do I make payments?Your payment is set up with youradministrator who will direct debitit rom your bank account weeklyor ortnightly and then distribute it

to your creditors.Who is an administrator?An administrator is licensedwith ITSA and is responsible orcollecting and distributing yourpayments to your creditors. Ourpreerred administrator is D.R.Administration Pty Ltd.

Who is ITSA?The Insolvency and TrusteeService o Australia (ITSA) is thegovernment body responsible orreviewing and acilitating DebtAgreements.

Will a Debt Agreement afect mycredit rating?

Yes, both Debt Agreementproposals and Debt Agreementsare listed on the National PersonalInsolvency Index (NPII). Some creditreporting agencies may access theNPII and list the agreement on yourpersonal credit le.

Do I pay my unsecured creditors

whilst I wait or them to vote?We cant tell you whether or notto pay your creditors that is yourdecision. However, you must treatthese creditors equally and airly. Itis important to pay your securedcreditors (like mortgages etc)otherwise you run the risk o thatasset being repossessed.

Are there any ees?Your administrator will receive a ee(which is approved by creditors),the Government departmentITSA will also receive a realisation

ee (approximately 4% o yourpayments, as at the 22 December2009). These amounts are includedin your payments and are notadditional charges to you. CreditRepair Australia may also chargean up ront ee to be paid beoreyour Debt Agreement paymentsbegin.

How long does it take?The time between appointingCredit Repair Australia or youradministrator and the creditorsvoting date is approximately 50-55days, however each case varies.

What i my creditors continue to

call?I your creditors continue topressure you or payment,simply advise them that youare attempting to propose anarrangement and i they have anyquestions to call us on 1300 304352.


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CaseStudy-DebtAgreement(PartIX)

Garette Denaloo had a personal loan with his bank or about $9,600, acredit card that was close to its limit owing about $15,500, a loan with anance company rom when he bought a car which was unsecured owing$12,200 and a ew other small unsecured debts. The total o Garettesdebt was approximately $39,730. When Garette couldnt make all o therepayments he started getting phone calls rom the banks and nancecompanies pressuring him or money.

The SolutionGarette approached Credit Repair Australia concerned about hissituation earing that his creditors would begin to repossess goods romhis house or even garnish his wage. Ater working on Garettes nancialdetails, Credit Repair Australia was able to work with a Debt AgreementAdministrator to develop a proposal and a statement o afairs to putorward to Garettes creditors. This proposal was or Garette to repay $175per week over 4 years.

The OutcomeThe small unsecured creditors and the bank with the loan or $9,600 didnot vote on Garettes proposal. The credit card company with the debt o$15,500 voted yes and the nance company who was owed $12,200 voted

no. Because the credit card company voted yes and they were owed morethan 50% in the dollar value o the creditors who voted the proposal wasaccepted.

All o Garettes creditors including those who didnt vote and the nancecompany who voted no were bound by the proposal. All o the intereston all o the accounts was rozen, Garette paid $175 per week or the ouryears. At the end o the our years Garette had paid a total o $36,400 andalthough this didnt equal the total debt he owed ($39,730) Garette was

released rom all o his debts and never had to pay anything on thoseaccounts again.


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PersonalInsolvencyAgreement

A Personal Insolvency Agreement (PIA) is similar to a Debt Agreement,however they are not the same. Much like a Debt Agreement youcan make an afordable proposal to your creditors to repay your debtover a period o time, however there are no income, asset or debtlimits (thresholds). A Personal Insolvency Agreement is sometimes lesssuccessul and more ormal than a Debt Agreement.

Under a Personal Insolvency Agreement you may be able to propose:

To pay less than the ull amount o the debt Make payments in a lump sum or instalments

Transer some o your assets to your creditors Make regular more afordable repayments Make diferent rates o payments among creditors

In order to propose a Personal Insolvency Agreement a controlling trusteeneeds to be appointed. Credit Repair Australia are not trustees howeverwe may be able to help you nd one. Your trustee may take control o yourassets, call a meeting o creditors to consider your proposal and investigateyour nancial afairs in order to report to creditors. You will need to attend

a meeting o your creditors where they will vote and accept or declineyour proposal.

CaseStudyPersonalInsolvencyAgreement

David Mintasio had a business which was not doing so well. As a resultDavid had approximately $134,342 in unsecured debt and was thereorenot eligible or a Part IX Debt Agreement.

The SolutionCredit Repair Australia was able to help David prepare a PersonalInsolvency Agreement by appointing a trustee.

The OutcomeDavid made a proposal to repay $82,780 over the period o 4 years and thiswas accepted by his creditors. Ater the 4 years David was released romthe total $134,342 o debt.

FormalOptions


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What is a Personal InsolvencyAgreement?A PIA is an alternative tobankruptcy where you enter intoan afordable arrangement withyour provable unsecured creditors.

What does insolvent mean?You are technically insolvent iyou cant pay all your debts as andwhen they all due.

Is it the same as Bankruptcy?

A PIA is an alternative toBankruptcy. However, byappointing a controlling trusteeyou are committing an act oBankruptcy. I a PIA ails, a creditorcan use this to apply to a court tomake you bankrupt.

What are the benets?

A PIA enables you to proposeafordable payments over a periodo time, even i they equal less thanthe ull amount that you owe. APIA may also allow you to ofer alump sum to creditors that is lessthan the ull amount o the debt.

There are no asset, income or debtthresholds with a PIA. PIAs alsohave the ability to pause all interestand protect you rom any actionwhilst the agreement is in place oronce its nished.

How does it work?A registered trustee will prepare areport to your creditors outliningthe proposal and how it willcompare to their returns i youbecame bankrupt. All creditors

then have the opportunity to voteat a meeting held by the trustee.

What is provable unsecured debt?Examples o provable unsecured

debt include medical and phonebills, credit card debt, personalloans and the shortall romsecured debts etc.

What type o ofers can I make?There are three main types o ofersyou can make;

1. Payments set out over a periodo time, lump sum payments or acombination o both.

2. An assignment o an asset inplace o the debt (property).

3. Placing your business in thehands o an administrator, whocontinues to run it or the benetso the creditors.

Do all creditors have to agree to myproposal?No, not all creditors have to agree.I the majority in number (51%) andmore than 75% o the dollar value,o those who decide to vote, voteyes, then your proposal is acceptedand all creditors in the proposal

are bound by it. This includes thecreditors who didnt vote or evenvoted no.

Can you guarantee that it will beaccepted?No, it would be unproessional tomake such a guarantee. It is yourcreditors who decide whether they

accept or reject your proposal.


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Whats the best way to get my proposal accepted?Your responsibility is to make ull and complete disclosure o your nancialposition, put orward the best ofer you can and commit to complyingwith the terms o the agreement. This is the best way to ensure you aredoing everything you can or your agreement to be accepted.

Where do I nd a trustee?There are a number o trustees available to handle a PIA, however it isimportant that you nd the right one or you. Credit Repair Australia canhelp you nd a registered trustee.

Who is ITSA?The Insolvency and Trustee Service o Australia (ITSA) is the governmentbody responsible or reviewing and acilitating Personal InsolvencyAgreements and other matters.

Will a Personal Insolvency Agreement afect my credit rating?Yes, a Personal Insolvency Agreement is listed on the National PersonalInsolvency Index (NPII). Some credit reporting agencies may access theNPII and list the agreement on your personal credit le.

Do I pay my unsecured creditors whilst I wait or them to vote?We cant tell you whether or not to pay your creditors that is your decision.However, you must treat these creditors equally and airly. It is important

to pay your secured creditors (like mortgages etc) otherwise you run therisk o that asset being repossessed.

Are there any ees?Your trustee may receive a ee, the Government department ITSA may alsoreceive a ee. Credit Repair Australia and/or its associated entities may alsocharge a ee which may be up ront and/or ongoing.

What i my creditors continue to call?

I your creditors continue to pressure you or payment, simply advise themthat you are attempting to propose an arrangement with Credit RepairAustralia and i they have any questions to call us on 1300 304 352.

How long does it take?The time it takes between appointing Credit Repair Australia and thevoting dates o your creditors is approximately 35 days, however each casevaries.

What happens next?I accepted the creditors listed in the agreement can take no urther actionagainst you, provided you comply with the terms o the agreement.


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PersonalInsolvencyAgreementProcess

The time between appointing Credit Repair Australia and the creditorsvoting date is approximately 35 working days, however each case mayvary.

1.1 Consultantcollects vital

inormation andprepares a budget

1.2 Credit RepairAustralia reviewsposition & budget

and prepares all

documents or thetrustee

2.1 Controlling

trustee is appointed

2.2 Meeting o

creditors is held (youmust attend)

2.3 I more than 50%o the creditors who

decide to vote, withmore than 75% o

the dollar value vote

yes, your proposal is

accepted

2.4 Once you havemet the terms o

your proposal youare now releasedrom all o those

debts

3.1 I 50% or moreo the creditors who

decide to vote with75% or more o the

dollar value vote no,your proposal is

not accepted

3.2 Your situationmay be reviewed

3.3 Another optionmay be proposed


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Bankruptcy

Bankruptcy is a process where people, who cannot pay their debts receivethe protection o the Bankruptcy Act and may hand over control o theirassets to a trustee in attempt to resolve their nancial afairs. There are twomain ways to be made bankrupt; declaring yoursel bankrupt or beingmade bankrupt by a creditor. Bankruptcy is an option i you are unable tocome to any arrangement to satisy your unsecured creditors.

Bankruptcy is the right option or some, however many people who areeligible or a Debt Agreement decide to enter one because o the numbero benets that Debt Agreements have over bankruptcy.

Bankruptcy may release you rom your debts, however you need to beaware that:

Your trustee may seize any unprotected assets to pay your creditors Your travel may be restricted and you may have to hand over your

passport to your trustee Your job opportunities may be afected, especially in handling

money or where a licence is required (e.g. security industry orlicensed builder)

There are some debts that you may not be released rom You may be required to make monetary contributions to yourcreditors i your income exceeds a certain level.

Your bankruptcy may be rejected by the Insolvency and TrusteeService o Australia (ITSA)

However bankruptcy can ofer many benets to those with no otheroption.


How long does bankruptcy last?Bankruptcy usually lasts 3 years, however this period may be extended upto 8 years through an objection by the trustee.

Why would I become bankrupt?You would usually become bankrupt i you had no other option to resolveyour debt, or your creditors orce you into bankruptcy.

What happens to my debt?Ater your bankruptcy you are discharged rom all your provable debts.

FormalOptions


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What is a provable debt?A provable debt is a debt or which a claim can be made in yourbankruptcy.

What i someone has guaranteed some o my debt?Bankruptcy does not afect the rights o a creditor to claim under a

guarantee. The creditor is entitled to recover payment rom the guarantoras per their original agreement.

What happens i I incur debt ater bankruptcy?You will be responsible or any debts incurred by you ater bankruptcy.

Can my creditors still contact me or payment ater I become bankrupt?No. The Bankruptcy Act prevents creditors rom receiving money rom you.I your creditors contact you or payment you should contact your trustee

immediately. However i you have made arrangements to retain securedproperty such as your house this is an exception.

Can I continue to use my credit cards?It is up to the credit provider o the card whether they are prepared toextend credit to you. However, they will be notied o your bankruptcy.

What i I orgot about a debt at the time o becoming bankrupt?I you orget about a debt and remember it later, you should contact yourtrustee as soon as possible so that it may be added to your list o creditors.Failure to disclose debts could extend your bankruptcy to 5 years.

Thereore it is important that you list all your creditors in your statement oafairs.

Will I lose my car or other assets?Once bankrupt you can no longer sell or deal with most o your assets oritems o value. Your trustee can sell your property or the benet o thecreditors. Some assets that are protected under bankruptcy and cannotbe sold by your trustee include; necessary household urniture, personalefects, limited tools o trade, lie insurance and superannuation policies,and a motor vehicle up to the prescribed amount in value.

Will I lose my house?It is up to the trustee to determine whether your house is sold, howeverthe trustee must act in the best interest o the creditors. I you are eligibleyou might be able to utilise a Debt Agreement or Personal InsolvencyAgreement as a way o protecting your house or other assets.


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Who is ITSA?The Insolvency and Trustee Service o Australia (ITSA) is the governmentbody responsible or reviewing and acilitating Bankruptcies.

How does bankruptcy afect my employment?I you are engaged in particular trades or proessions there may be certain

restrictions imposed by proessional associations or licensing authorities. Iyou all in this category you should contact your proessional associationor licensing authority to conrm whether there is any efect on yourmembership or ability to practice a particular trade.

Do I need to make contributions/payments rom my income?I your income exceeds the threshold amount you may have to makecompulsory contributions to your trustee. However there are certaincircumstances where you may benet rom voluntary contributions.

What happens to any assets that have not been sold ater I am discharged?Those assets are not returned to you. The trustee may sell such assets aterthe date o discharge.

When are my creditors notied o my bankruptcy?They are notied in writing as soon as possible by the trustee andinormed o the assets and liabilities disclosed by you on your statement oafairs.

What are my rights and responsibilities once bankrupt?Borrowing Money - It is an ofence to borrow over a certain limitunless you inorm the person that you are dealing with that you are anundischarged bankrupt.

Operating a Business - You can still operate a business while bankrupt.I you trade under an assumed name or business name you will have todisclose your bankrupt status. However you cannot be a director o a

company.

Change o Name, Address and Overseas Travel - You are required tonotiy your trustee o all changes o name and/or address. I you wish totravel overseas you must obtain the written permission o the trusteeadministering your estate who may impose conditions o travel.

Is my bankruptcy advertised?Generally no, however your trustee may choose to do so.


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Will I have to appear in court?Your trustee will decide whether there are matters requiring examinationbeore the ocial receiver or the court.

Are there ofences under bankruptcy?Yes. Examples include; disposing o assets beore bankruptcy, ailure to

disclose assets, obtaining credit whilst insolvent, incurring debts over theset limit whilst in bankruptcy, leaving Australia without the permissiono the trustee and more. Penalties or these ofences are up to 3 yearsimprisonment.

Will bankruptcy afect my credit rating?Bankruptcies are listed on the National Personal Insolvency Index(NPII). Some credit reporting agencies may access the NPII and list yourbankruptcy on your personal credit le.

What happens to my ABN when I am bankrupt?Your trustee will notiy the deputy commissioner o taxation o yourbankruptcy. I you wish to continue to use the ABN you will need tocontact the tax oce and have your ABN reactivated. You will still beresponsible or lodging your BAS statement regardless o bankruptcy.

What i I get a tax reund?I the tax oce is a creditor, they may keep the reund as an ofset to the

amount owing. Reunds rom income earned beore bankruptcy can beclaimed by the trustee. Reunds rom income earned whilst bankrupt aretreated as income and may afect your compulsory contributions.

What i I transerred my house or any other asset o value to someoneelses name prior to bankruptcy?

The trustee has the power to void transactions made within 5 years priorto the bankruptcy. The trustee will investigate the transer and may recoverthe asset i the transer was to deeat creditors or i the payment or the

asset was less than the market value or i it was a preerence to othercreditors.

Are there any ees?Yes, we may charge you a ee as may your trustee and/or the government.

To nd out more please call our head oce on 1300 304 352.

Source: http://www.itsa.gov.au/dir228/itsaweb.ns/docindex/bankruptcy-%3Eaq?opendocument#7 as at the 01/01/2010.


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BankruptcyProcess

The time taken to complete this process is approximately 28-35 days,however each case varies.

1.1 Consultant

collects vitalinormation and

prepares a budget

1.2 Credit Repair

Australia reviewsposition & budget

and prepares alldocuments or the

trustee

2.1 Documents are

either sent to you orsigning or orwarded

to a trustee

2.2 Your trustee

receives and reviewsthe inormation

3.1 Your documentsare lodged with ITSA

3.2 I accepted orprocessing, you are

now bankrupt

CaseStudy-Bankruptcy

Melanie Steinord was having trouble paying back her personal loan andher credit card. Melanie owed approximately $27,000 in total and herhours had been reduced at work.

The Solution

Melanie approached Credit Repair Australia as she needed assistancewith her options. Credit Repair Australia compiled a detailed budget orMelanie and concluded that she did not make enough money to have aDebt Agreement accepted. Melanie decided to become bankrupt.

The OutcomeCredit Repair Australia assisted Melanie with her Bankruptcy, a trustee wasappointed and Melanie became bankrupt.


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WhotoContact

NewClients

I you have not yet seen a consultantplease call our customer coordinatorteam.

I you have seen a consultant andnow wish to proceed please callthem directly. Alternatively you maycall our head oce.

Allotherenquiries

For all other enquiries including;credit repair updates, inormalarrangements, debt agreementenquiries, payments and creditorenquiries please phone our headoce..

1300 349 273(1300 FIX CREDIT)

1300 304 352

1300 304 352

CreditRepairAustraliaPtyLtd

Postal Address: P.O. Box 392 MoorebankNSW 1875 Australia

Web: www.creditrepairaustralia.com

Email: [email protected]

ACN: 120 248 311

Date post:	05-Apr-2018
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