If by now you are carefully considering proceeding then these are my list of dos and don’ts. I hope you find them useful.
Stop worrying …… easy to say but perhaps harder to do.
From my own experience I know that you will have been worrying and losing sleep for weeks, months, possibly even years.
Stop worrying about your problem debt as your bankruptcy will deal with your debt properly in the next week or two. You have probably spent more time worrying about your problem debt than is sensible already.
My suggestion, try to get a good night’s sleep (and go back to bed if you are reading our website at 3am in the morning).
Once you have decided to proceed then make no further payments on your unsecured debts like credit cards, personal loans, store cards, tax payments etc.
Ordinarily I think you should keep making normal payments for rent or mortgage, your phone, utilities, insurances and your car payment (if you intended to keep your car).
If you are being bombarded with blocked number phone calls, texts and threatening letters then my suggestion is to ignore them.
They will go away pretty quickly once your bankruptcy application is in place.
And they never come back.
Once you have made the decision to go into bankruptcy then stop using your credit cards and any open lines of credit immediately.
In fact it is probably a good idea to cut up any credit cards you have and put them in the bin.
Use your common sense!
Some companies who offer what might, at first glance, look to be similar services to us ask for you for authorization to use your credit card to pay their fees.
Sometimes they are asking for a lot of money, usually up front.
What people tell us is they are told by the salesman that this is good news as you won’t personally end up paying their fee.
What seems to be said is that the bankruptcy service fee ends up being the last transaction on your credit card account before the credit card balance is cancelled by you entering bankruptcy.
If queried, people have said to me they are often told by the salesman that as the banks and credit companies are insured then no one gets cranky or hurt.
Does this sound like it might be credit card fraud to you?
What the bankruptcy salesman might be neglecting to tell you is that Australian bankruptcy law has a provision that aims to strongly discourage you from using your credit card to pay for a bankruptcy service.
Surely you don’t want to find yourself being accused of credit card fraud at some point down the track?
My suggestion, just use your common sense and don’t take the risk in the first place.
In nearly twenty years I have never asked to be paid from a client’s credit card for two reasons. Number one, I am certain it would be seen as fraud, and number two, going into bankruptcy has got to be about reducing your stress levels and resolving problems.
Bankruptcy should never be about creating new problems and pressures that were not there in the first place which would be the risk if you went ahead and used your credit card to pay for a bankruptcy service.
Nobody with an ounce of common sense would allow their credit card to be used in this way and nobody reputable would ask for payment of their fee via a credit card in the first place.
I have always taken the view that if I look after my clients then they in turn will look after me.
Nearly twenty years later I know this philosophy and way of doing business works.
Each week we are contacted by someone who has been recommended by a colleague, friend or family member of someone we helped two, three or sometimes even five years ago.
They usually say something like.
‘……..you assisted my brother five years ago, he could not speak highly enough of how you dealt with him and the service you provided, please listen to my situation as I think I may need your help……..’.
And we take it from there.
I find it a very natural way to do business and it stems from a desire to always try do the right thing by the client and to treat them fairly at all times.
If you have a house or other major assets that might be effected by you being bankrupt it makes sense to establish contact with a registered Trustee early on.
Similarly if you are a higher income earner and you expect you will pay income contributions whilst you are bankrupt then it makes sense that you establish contact with a registered Trustee to confirm your estimated income contribution calculations are accurate.
Alan Nicholls is someone Steve and I have known for many years.
Alan is a registered trustee in bankruptcy and is the principal of Nicholls & Co, Chartered Accountants.
Nicholls & Co specialise in personal insolvency situations, they do not prepare tax returns. Alan has written an excellent website that explains, from the Trustee’s perspective, how bankruptcy works.
The Nicholls & Co website address is : www.nichollsco.com.au
The feedback we regularly hear is that Alan is approachable and knows what he is talking about when it comes to bankruptcy situations.
Alan can discuss with you how bankruptcy would work in relation to major assets like your house, an investment property, higher value vehicles, farm equipment and anything like that.
And if you are a higher income earner he can discuss with you how the bankruptcy earnings contributions calculation works.
Alan can consider acting as your trustee in bankruptcy if you ask him, that is always between you and Alan.
Alan’s main criteria for a new client is that you are who you say you are and at the same time he needs to be confident that you have a genuine intention do what you are supposed to do during the period you are a Nicholls & Co client.
In turn, you can expect that Alan will tell you he will follow the bankruptcy system prescribed by his regulator in an open, honest, fair and respectful manner. That way everyone knows where they stand.
From what I have seen over the years, bankruptcy seems to works best for everyone when there is a ‘position of common understanding‘ between the pending Trustee and the person needing to go into bankruptcy before things get underway.
Conversations with Alan will usually be about you finding out information about how bankruptcy would likely work in your situation, and at the same time Alan gets to find out about you and your situation.
I guess you could say these ‘getting to know you‘ type conversations are a useful way for both parties to try to get to a ‘position of common understanding‘.
If you want to have a talk with Alan Nicholls then the Nicholls & Co office switchboard number is 02 67 66 9245.
Alan is in a position to agree to be Trustee on bankruptcy files from anywhere in Australia, you need to get his consent however, so a conversation or two is always a good idea.
If you place a call to Nicholls & Co then you should mention to the receptionist that have been reading Fred Appleton’s website and then provide a very short summary of your situation asking if Alan could return your call when it is convenient.
I don’t get a commission for any business that Alan Nicholls gets from people who read my website, instead I charge Alan a fixed amount each year for advertising on this website and the Bankruptcy and Houses website www.bankruptcyandhouses.com.au
If you are a company director and the company has assets, significant goodwill, a valuable license, money in the bank or money owed to it from sales or work already completed (or in progress) and if you are looking at bankruptcy for yourself as an individual then you may be best to deal with the company first.
That might mean that the company needs to be placed into voluntary administration or liquidation prior to you going into bankruptcy.
Nic Crouch and Shabnam Amirbeaggi are the two partners at Crouch Amirbeaggi.
Nic is a Chartered Accountant, Official Liquidator and Registered Trustee in Bankruptcy.
Shabnam is a CPA, Official Liquidator and Registered Trustee in Bankruptcy.
They are based in Sydney and their firm and can take on work from anywhere in Australia.
The firm’s website is at: www.crouch.com.au
For many years I’ve suggested to people who have companies that need dealing with that they give Nic or Shabnam a call and I’ve had many good reports back.
The Crouch Amirbeaggi switchboard number is: 02 8262 9333
Or you can send an email to: email@example.com
It is a good idea to mention to the receptionist (or in your email) that have been reading Fred Appleton’s website.
Just to let you know Crouch Amirbeaggi pay a fixed annual fee for advertising on this website.
If you have many years of outstanding personal tax returns then my suggestion is to bring them up to date either now or shortly after your bankruptcy application is accepted.
Sometimes the tax office debt is the main reason why bankruptcy needs to be considered in the first place.
From what I have seen over the years self-employed people sometimes get a long way behind on their business and personal tax returns.
Often they have lost touch with the previous Accountant.
That is not actually the big showstopper that most people seem to think it is.
We usually suggest that anyone who requires many years of outstanding tax returns bought up to date make contact a firm of Tax Accountants in Coffs Harbour, NSW to start a conversation.
They firm is McGrath Quality Accountants.
The website link for McGrath Quality Accountants is: www.maqa.com.au
Email is : firstname.lastname@example.org
Telephone number is: 02 66 52 7003.
McGrath are a family firm of Accountants with the partner in charge being Kylie Marle.
Kylie is a CPA and took over the management of the firm from her father Gerard McGrath in 2010.
If you place a call to McGrath then please mention to their receptionist that you have had good read of Fred Appleton’s website and you would like to have a discussion with Leanne Wellington. Leanne is the Senior Accountant who looks after incoming clients who have many years of outstanding tax returns to sort out.
Or you can ask for Kylie if Leanne is not available.
Please tell Leanne or Kylie that you may have to go into bankruptcy shortly (or you have just had a bankruptcy application accepted in the past few weeks if that is the case for you).
Be assured that both Leanne and Kylie are up to speed on how bankruptcy works and take a positive view.
Typically Leanne or Kylie will chat to you over the phone for five or ten minutes and then they will send you their questionnaire asking you for some basic information on your business structure, income and expenses and when your individual tax return was last lodged.
They will quote you a fee for their work and I expect they will want some funds paid up front before they begin work on your file.
You can be anywhere in Australia and McGrath will be able to talk to you.
The feedback we hear about McGrath service and attitude is consistently positive, most times people seem to say that it is a great relief that long overdue tax returns are being bought up to date by a professional firm who don’t make a song and dance about it.
And at the same time the bankruptcy system is available as a means to deal with the financial fallout from unmanageable personal tax debt if necessary.
If you have made the decision to go into bankruptcy then it is important that your bankruptcy petition, government declarations and any accompanying schedules are prepared to a professional standard and in accordance with the law.
We provide a service to prepare these documents on your behalf.
The aim of our service is to take the stress out of putting your bankruptcy application in place.
It takes us just a few days to prepare all the necessary government paperwork ready for you signature.
For most clients they are bankrupt and free of their problem debt within about a week of their first contact with us.