What is the downside of filing for bankruptcy?

Bankruptcy is a solution for overwhelming debt – it removes permanently most if not all of the debt – protects your wages - allows you to keep assets so as you can live – allows you to reset to get going again on your terms and gives you a future without being overburdened by debt you just cannot pay.

We consider the main downside of bankruptcy is that you will be bankrupt for three years and if you have any windfall gains in that time, they will go to your bankrupt estate for the benefit of your creditors. An example of a windfall gain would be a lottery or gambling win, an inheritance or gift. If you were to win the lottery, the Trustee would pay your creditors and costs of your bankruptcy. The balance of the funds would be returned to you by the Trustee and your bankruptcy annulled.

To explore the downsides of bankruptcy we recommend the following articles on our website:

1/ What are the downsides to bankruptcy click here

2/ The pros and cons of bankruptcy click here

We are here to help. If you have any questions please give us a call on 1300 794 492 or email hello@understandingbankruptcy.com.au