Is Declaring Myself Bankrupt the Best Option?

[nose]

I have a liability to a costs debt from loss of a Tribunal case NSW. The amount is yet to be determined as it has to be assessed, where the process has not been started by the winning party as yet. It will be a significant sum as the other side had 2 different Barristers batting for them.

I only have Centrelink benefit now as income and due to start income stream from superannuation (qualify under disability) as my long term income, Centrelink will go eventually. The only asset of value is my home, paid off. I want to save it from the creditors. How?

I thought I might be able to declare myself bankrupt, either sell my home and put money into my current super whilst I haven't been served with an amount to pay, or transfer my home into an SMSF (move out, run it as an Air BNB where income goes to SMSF).

I am under preservation age. Will this trigger unlawful conduct or can I get it through?

Also have some shares in family trust account. The trust was started during the proceedings, is that safe or should I sell them and spend the money?

 

[patrik6]

Don't sell your home and go bankrupt. That is a deliberate attempt to evade creditors. Same applies to super. You have nowhere to go except to try and negotiate a payment plan.

If you are unsure of rules of bankruptcy, see a bankruptcy expert, usually chartered accountants or lawyers. An error in this area can be costly

 

[David Smith]

I could be in a similar situation soon. I am currently on Centrelink and about to apply to my super company for an early release on compassionate grounds for rehab and also my salary continuance cover application is in process for my bipolar & anxiety disorders.

If I loose in court because I can't afford to defend myself for a debt dispute that is from when I was working overseas (not sure how they can sue me now I have come home for medical treatment but thats a different issue), I would like to know and perhaps @patrik6 would like to know -

1. Can Centrelink and/or Disability Support Pension payments be garnished?

2. Can an amount of around $15,000 early release of super (granted based on compassionate grounds to be used for rehab) be garnished?

3. If I receive salary continuance cover because im medically unfit to work can they garnish these payments?

4. What is the best solution? I have zero assets remaining. Can I go bankrupt to avoid losing what little I will have to live from? I am honestly not worried about my credit rating. I think it's screwed anyway due to my bipolar spending sprees.

I'm happy to go live o/s for 5-7 years. I can't afford to stay in Aussie anyway.

Hope someone can make any suggestions.

 

[Rob Legat - SBPL]

1. No. Generally, judgment debtors in receipt of social security payments (only) are considered 'judgment proof' as the Social Security Act doesn't allow garnishment of these payments.

2. Amounts from a bank account can be garnished.

3. Possibly. It would depend on the exact nature, and whether there is any prohibition in the law.

4. Possibly. You should speak to a professional bankruptcy trustee and get some advice that takes into account your total financial situation. There's simply not enough information here to give you sensible advice.

 

[patrik6]

My suggestion will differ to others but bankruptcy solves most of your financial worries stops phone calls and is over in 3 years jot worried bout credit rating do.

However I am puzzled that you want to live oversea as as first the trustee may take your passport then you have to convince them how you are financing your travel and if you're planning on survivng overseas on Centrelink pension or other, you need to reconsider and check the rules.

I've lived in Asia and yes it's cheap but the medical is not at least here. You have medicare. Give your situation a lot of thought and perhaps see a financial counsellor but remember bankruptcy stops the worries and harassment and you get to sleep at night.

You can still work and earn some 1000 or so a week and own a cheap car. Last I checked it was about 7400.

Good luck

 

[David Smith]

Thanks for the replies and input.

I was living in South East Asia for over 3 years which is where this debt dispute is from.. and I have no idea how this is going to hold up in an Australian court!?

I have been back (in Aus) approx 6 months only for medical treatment and don't plan on sticking around and rehab will be over seas due to the significantly lower cost and better programs. My superannuation insurance will pay me world wide until I can work again. There are some really good international hospitals in SE Asia and my travel insurance covers absolutely everything including medical evacuation back to Australia.

I have problems working now and on medication and about to go through rehab programs for both addiction and to manage the bi-polar (manic-depression) to re-enter the workplace. At the moment I am totally unstable to keep a job. I can't even complete a task deadline on freelancer. This is a whole different matter and a bit off topic...

I'm more concerned about my salary continuance and rehab money being garnished as if that happens i am 100% screwed - game over, see ya on the other side!

Q - If I declare bankruptcy will this avoid all garnishing completely? Question only - not seeking help here.

Q - Can over seas bank accounts be garnished?

 

[David Smith]

My suggestion will differ to others but bankruptcy solves most of your financial worries stops phone calls and is over in 3 years jot worried bout credit rating do.

However I am puzzled that you want to live overseas as first the trustee may take your passport then you have to convince them how you are financing your travel and if you're planning on surviving overseas on Centrelink pension or other, you need to reconsider and check the rules.

I've lived in Asia and yes it's cheap but the medical is not at least here. You have medicare. Give your situation a lot of thought and perhaps see a financial counsellor but remember bankruptcy stops the worries and harassment and you get to sleep at night.

You can still work and earn some 1000 or so a week and own a cheap car. Last I checked it was about 7400.

Good luck

I just looked into bankruptcy...wow I didn't realise they can refuse overseas travel and garnish income over a certain amount.. :/

 

[patrik6]

i believe u will find that state debt is not wiped under bankruptcy im sure court costs fit into that area