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This booklet and all information contained within is copyright to Credit Repair Australia Pty Ltd. All rights reserved. ACN: 120 248 311. The redistribution, copy, reproduction or un-authorised use of this booklet, its material and/or content is not permitted without prior written consent.

DISCLAIMER The information contained in this booklet has been developed as a guide for individuals experiencing difficulty with debt and credit issues. The following information should in no way be considered advice. Before anyone decides on a specific option they should always seek independent advice from a financial advisor, counsellor, government body and/ or solicitor. Credit Repair Australia and its associated entities are not financial advisors, counsellors, solicitors and are not affiliated with the government outside their requirements by law. Furthermore Credit Repair Australia does not guarantee the accuracy of the following information and do not claim that it is free from inaccuracies or mistakes.

Credit Repair Australia is the countries oldest, largest and most successful company who specialise in both past and current credit problems. Since we began we have assisted more than 25,000 people with debt and credit issues. Our options range from alternatives to bankruptcy through to credit report improvements. This booklet has been designed as a guide to a number of options for people experiencing difficulties with debt and credit issues. After reading this booklet if you have any questions please feel free to contact your consultant or call our head office on 1300 304 352.

Contents
Credit Repair............................................................................................. 4 Informal Options Creditor Negotiations......................................................................... 8 Debt Settlements.................................................................................. 8 Creditor Moratorium........................................................................... 8 Formal Options Debt Agreement (Part 9).................................................................. 10 Personal Insolvency Agreement (PIA)...................................... 16 Bankruptcy................................................................................................ 20 Who to contact...................................................................................... 27

Credit Repair
Otherwise known as a Credit Report Improvement (CRI), Credit Repair is the removal of unfair, disputable & contestable listings from credit reports. When you apply for any type of credit, your credit report is almost always checked. Your credit report is a basic history of your past financial activity and is one of the main factors in determining whether or not you get approved for credit. A credit report generally contains information such as; addresses, employment history, current employment, credit applications, defaults (overdue accounts), court judgments, clear-outs, crossed or linked files, name changes and bankruptcies etc. When you make these enquiries or applications for credit, even a mobile phone on a contract or apply for an interest free store offer, chances are your details have been given to a credit reporting agency. These unfair, disputable and contestable listings do happen, and they may be legally removed. The benefits of credit repair include: Removing negative listings can result in instant credit approval Reducing interest rates Reducing up front and ongoing fees Reducing repayments Saving thousands Unfair, disputable and contestable information that may be removed from your credit report include: Overdue accounts Defaults Court listings Judgments Clearouts Crossed or linked files (cross references & possible matches) Multiple identities More

The Credit Repair Process


The time it takes to complete this process varies case by case and is determined by accurate and prompt information being received from you, the credit providers and other relevant organisations.

Consultant completes docs & forwards to the office

Office confirms details sent in by your consultant with you

Your case manager is appointed

Your case manager prepares your case to the credit provider, credit reporting agency & other relevant organisations

Credit provider or relevant organisation evaluates correspondence and decides whether or not to comply with the request to remove item/s

Credit Report Improvement team receives a response from the credit provider or relevant organisation

You are notified of the response, if it is positive the items are removed and you may be free to obtain finance

If the response is negative, your case is reviewed and may be resubmitted to the credit provider or relevant organisations

You may also have further options in regards to potential legal action

Frequently Asked Questions


What is a credit report? A creditor report contains information about who you are and a history of your financial behaviour. In many cases the credit report is the basis of evaluating your credit rating or determining your credit worthiness. What is in a credit report? Each report usually consists of your name, address, employment history, date of birth, a list of creditors who have viewed the report, any late payments, defaults or judgments, clear-outs, crossed or linked files, name changes and bankruptcies etc. Do I have a credit report? There are over 14 million credit reports held in Australia. Chances are you have a credit report if you have ever applied for or enquired about any financial product, mobile phone contract, store credit card, credit card. How did I get this report? When you make any enquiry or application for credit, you may have consented for the credit provider to give your details to a credit reporting agency. How does my credit report effect me? Every time you apply for credit, or when you are late paying a bill, it all goes on your credit report. If you have defaults (late payments) or other negative notes on your

file you may be considered a bad credit risk, even if they have been paid. Therefore you may pay a higher interest rate or you may be refused credit altogether. How much bad credit does it take to be declined? As you may have already experienced, even one small late payment listing, may result in credit refusals. Any negative credit whatsoever can become a substantial credit obstacle even if you have paid the account. Does paying the debt fix my credit rating? When you pay a debt, the listing is not removed from your credit report, it may only be updated to a paid status. How do you remove these listings from my credit report? Credit Repair Australia negotiates with credit providers and credit reporting agencies based on your rights under different areas of law, in order to have the listings removed. Do you provide a guarantee? No, however we have an administration and a success fee. The success fee is only paid if we are successful in improving your credit report. Are you lawyers or financial advisors? No, we are not financial advisors, lawyers or solicitors.

How long does it take? It is inappropriate for anyone to promise a particular time frame. If credit information is received promptly, many clients see completion of the process within 35 working days. However, this is not a guide as to how long your case will take. Your results may differ depending on your situation.

Have you been very successful with this process? We are Australias most successful credit repair company, we have helped remove over 3,000 negative credit listings.

Case Study - Credit Repair


Damien and Julia Kent were told by their finance broker that because of a default listing on Damiens credit report, their application for a home loan with their bank had been declined. The finance broker gave Damien and Julia the option to get their home loan with a non-conforming lender with an interest rate around 3% per year above what they would have been paying with their bank. Damien and Julia did some calculations and realised that paying 3% per year 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 figure out their options. Credit Repair Australia found out that Damiens default was listed unfairly, a case was prepared and submitted to the credit provider that listed the default, the default was removed from Damiens credit report. The Outcome Damien and Julia returned to their finance broker with an improved credit report. The broker reprocessed their loan with their bank and it was approved. In this example Damien and Julia are now saving an estimated $8,230 every year in interest which equals a total saving of $246,000 over the life of their home loan.

Informal Options
An informal arrangement is a way of negotiating with your creditors in order to reach a desired outcome. The following are some options available under informal arrangements, however, it is important to remember that informal arrangements are generally less successful then formal arrangements.

Creditor Negotiations
There are circumstances where Credit Repair Australia can negotiate with your creditors on your behalf. This negotiation could possibly: Reduce your interest rates Pay less than the full amount to finalise the debt Provide a pause or moratorium on payments

Debt Settlements
A Debt Settlement is a type of Creditor Negotiation where you offer your creditors a lump sum for full and final settlement of a debt, this lump sum could be less than the full amount that you owe. When attempting a debt settlement it is important to remember: You must be insolvent or unable to pay the full amount The lump sum must come from a third party (family or friends) Debt Settlements are rarely effective with more than one creditor You must be insolvent or unable to pay the full amount in order to propose a debt settlement, otherwise your creditors may not see the value in settling your debt. If the lump sum was to come from yourself, you would have normally already put it towards the account to satisfy your obligations, therefore it may come from family or friends.

Creditor Moratorium
Creditor Moratorium is a type of Creditor Negotiation where we attempt to negotiate with your credit providers to put a hold on your repayments for up to 3 months. If you enter a Creditor Moratorium it is important to also establish a plan to deal with the debt so you can resolve it for good. This plan might consist of a formal or informal option.

Case Study - Debt Settlement


Nadine Seymor was finding it harder and harder to repay her credit card bill which was $25,270. Nadine asked the bank if she could have an extension on her repayments, the bank gave her one month to catch up on her bills and start paying off the rest of her credit card. The month passed 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 her they could give her some money to put towards her credit card, however they could not afford to pay the whole amount. The Solution Credit Repair Australia reviewed Nadines financial position and outlined her options, Nadine decided to go ahead with a Debt Settlement. Credit Repair Australia prepared a proposal and started negotiations with the bank. After a few weeks the bank responded and said that they would accept around $8,000 to settle Nadines outstanding credit card balance. The Outcome Nadine borrowed $8,000 from her parents and paid it to the bank to settle the whole credit card balance of $25,270. Nadine cancelled the card and she never paid any more on the account.

Formal Options
Formal options are a way of dealing with a number of creditors and finding a long term sustainable solution. Formal arrangements are often more successful than informal arrangements. The following are some formal options that may be available to you.

Debt Agreement (Part IX)


A Debt Agreement, otherwise known as a Part IX (or Part 9) is a formal, legally binding arrangement with your unsecured creditors. This means that once a Debt Agreement is accepted all of the unsecured creditors included in the agreement can not take any action against you outside the terms of your proposal. A Debt Agreement has the ability to: Protect your assets from repossession Release you from your debts (once the agreement has been met) Let you make affordable repayments on your debt May allow you to pay less than the full amount of the debt You are eligible to propose a Debt Agreement if: You are insolvent (unable to pay your debts when they are due) Your after 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 personal insolvency arrangement/part X or been bankrupt in the past 10 years from the date you were discharged.

How It Works
YOU YOUR ADMINISTRATOR YOUR CREDITORS

You make affordable payments to your Administrator (either weekly or fortnightly)

Your Administrator pays your creditors listed in the agreement from funds that you agree to pay

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Debt Agreement Process


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 complete your debt agreement is dependent on the term you put in the proposal.
1.1 Administrator checks info, prepares documents and sends to you for signing 1.3 Administrator sends the documents to the Insolvency and Trustee Service of Australia (ITSA) 1.2 Once youve checked and signed the documents, send them back to the office 1.4 If accepted by ITSA for processing, they forward to creditors to vote on the proposal

2.1 Of the creditors who vote, if those with more than 50% in dollar value vote yes, it is accepted

2.2 All of the creditors that you listed in the proposal are now legally bound by your offer, even if they didnt vote or voted no 2.4 Once you have met the terms of your proposal you are now released from all of those debts

2.3 You continue to pay your administrator who then pays your creditors for you

3.1 Of the creditors who vote, if those with 50% or more of the total value of your debt, vote no, it is not accepted 3.3 Your Debt Agreement proposal may be resubmitted with some changes

3.2 Your Situation will be reviewed

3.4 Your creditors vote again. If the proposal is rejected for a second time, Credit Repair Australia may propose a different option 11

Frequently Asked Questions


What is a Debt Agreement or Part IX (9)? A Debt Agreement otherwise known as a Part IX (9), is a simple way to come to an affordable arrangement with your unsecured creditors which is legally binding and will, if your creditors accept it, and you complete your obligations, release you from that unsecured debt. What does insolvent mean? You are technically insolvent if you cant pay all your debts as and when they fall due. Is it the same as Bankruptcy? A Debt Agreement is an alternative to Bankruptcy. However, by submitting a debt agreement proposal you are committing an act of Bankruptcy. If the proposal is not accepted by creditors, a creditor can use this to apply to the court to make you Bankrupt. What are the benefits? A Debt Agreement enables you to propose affordable payments over a period of time, even if they equal less than the full amount that you owe. Debt Agreements also have the ability to pause all interest and protect you from any action whilst the arrangement is in place or once its completed. Also your Debt Agreement administrator can talk to your creditors for you, therefore stopping all the harassing phone calls. Debt Agreements dont have the same restrictions
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as bankruptcy does (e.g. travel restrictions and restrictions on what you can own/keep). What is provable unsecured debt? Your provable unsecured debt is the only debt that you are able to put into your Debt Agreement. Examples of unsecured debt include medical and phone bills, credit card debt, personal loans and the shortfall from secured debts. Do all creditors have to agree to my proposal? No, not all creditors have to agree. If the majority in dollar value, of those who decide to vote, vote yes, then your proposal is accepted and all creditors in the proposal are bound by it. This includes the creditors who didnt vote or even voted no. Can you guarantee that it will be accepted? No, it would be unprofessional to make such a guarantee. It is your creditors who decide whether they accept or reject your proposal based on how much you can offer. Whats the best way to get my proposal accepted? Your responsibility is to make full and complete disclosure of your financial position, put forward the best offer you can and commit to complying with the terms of the agreement. This is the best way to ensure you are doing everything you can for your agreement to be accepted.

How do I make payments? Your payment is set up with your administrator who will direct debit it from your bank account weekly or fortnightly and then distribute it to your creditors. Who is an administrator? An administrator is licensed with ITSA and is responsible for collecting and distributing your payments to your creditors. Our preferred administrator is D.R. Administration Pty Ltd. Who is ITSA? The Insolvency and Trustee Service of Australia (ITSA) is the government body responsible for reviewing and facilitating Debt Agreements. Will a Debt Agreement affect my credit rating? Yes, both Debt Agreement proposals and Debt Agreements are listed on the National Personal Insolvency Index (NPII). Some credit reporting agencies may access the NPII and list the agreement on your personal credit file. Do I pay my unsecured creditors whilst I wait for 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 fairly. It is important to pay your secured creditors (like mortgages etc) otherwise you run the risk of that asset being repossessed.

Are there any fees? Your administrator will receive a fee (which is approved by creditors), the Government department ITSA will also receive a realisation fee (approximately 4% of your payments, as at the 22 December 2009). These amounts are included in your payments and are not additional charges to you. Credit Repair Australia may also charge an up front fee to be paid before your Debt Agreement payments begin. How long does it take? The time between appointing Credit Repair Australia or your administrator and the creditors voting date is approximately 50-55 days, however each case varies. What if my creditors continue to call? If your creditors continue to pressure you for payment, simply advise them that you are attempting to propose an arrangement and if they have any questions to call us on 1300 304 352.

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Case Study - Debt Agreement (Part IX)


Garette Denaloo had a personal loan with his bank for about $9,600, a credit card that was close to its limit owing about $15,500, a loan with a finance company from when he bought a car which was unsecured owing $12,200 and a few other small unsecured debts. The total of Garettes debt was approximately $39,730. When Garette couldnt make all of the repayments he started getting phone calls from the banks and finance companies pressuring him for money. The Solution Garette approached Credit Repair Australia concerned about his situation fearing that his creditors would begin to repossess goods from his house or even garnish his wage. After working on Garettes financial details, Credit Repair Australia was able to work with a Debt Agreement Administrator to develop a proposal and a statement of affairs to put forward to Garettes creditors. This proposal was for Garette to repay $175 per week over 4 years. The Outcome The small unsecured creditors and the bank with the loan for $9,600 did not vote on Garettes proposal. The credit card company with the debt of $15,500 voted yes and the finance company who was owed $12,200 voted no. Because the credit card company voted yes and they were owed more than 50% in the dollar value of the creditors who voted the proposal was accepted. All of Garettes creditors including those who didnt vote and the finance company who voted no were bound by the proposal. All of the interest on all of the accounts was frozen, Garette paid $175 per week for the four years. At the end of the four years Garette had paid a total of $36,400 and although this didnt equal the total debt he owed ($39,730) Garette was released from all of his debts and never had to pay anything on those accounts again.

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Formal Options Personal Insolvency Agreement


A Personal Insolvency Agreement (PIA) is similar to a Debt Agreement, however they are not the same. Much like a Debt Agreement you can make an affordable proposal to your creditors to repay your debt over a period of time, however there are no income, asset or debt limits (thresholds). A Personal Insolvency Agreement is sometimes less successful and more formal than a Debt Agreement. Under a Personal Insolvency Agreement you may be able to propose:

To pay less than the full amount of the debt Make payments in a lump sum or instalments Transfer some of your assets to your creditors Make regular more affordable repayments Make different rates of payments among creditors

In order to propose a Personal Insolvency Agreement a controlling trustee needs to be appointed. Credit Repair Australia are not trustees however we may be able to help you find one. Your trustee may take control of your assets, call a meeting of creditors to consider your proposal and investigate your financial affairs in order to report to creditors. You will need to attend a meeting of your creditors where they will vote and accept or decline your proposal.

Case Study Personal Insolvency Agreement


David Mintasio had a business which was not doing so well. As a result David had approximately $134,342 in unsecured debt and was therefore not eligible for a Part IX Debt Agreement. The Solution Credit Repair Australia was able to help David prepare a Personal Insolvency Agreement by appointing a trustee. The Outcome David made a proposal to repay $82,780 over the period of 4 years and this was accepted by his creditors. After the 4 years David was released from the total $134,342 of debt.

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Frequently Asked Questions


What is a Personal Insolvency Agreement? A PIA is an alternative to bankruptcy where you enter into an affordable arrangement with your provable unsecured creditors. What does insolvent mean? You are technically insolvent if you cant pay all your debts as and when they fall due. Is it the same as Bankruptcy? A PIA is an alternative to Bankruptcy. However, by appointing a controlling trustee you are committing an act of Bankruptcy. If a PIA fails, a creditor can use this to apply to a court to make you bankrupt. What are the benefits? A PIA enables you to propose affordable payments over a period of time, even if they equal less than the full amount that you owe. A PIA may also allow you to offer a lump sum to creditors that is less than the full amount of the debt. There are no asset, income or debt thresholds with a PIA. PIAs also have the ability to pause all interest and protect you from any action whilst the agreement is in place or once its finished. How does it work? A registered trustee will prepare a report to your creditors outlining the proposal and how it will compare to their returns if you became bankrupt. All creditors

then have the opportunity to vote at a meeting held by the trustee. What is provable unsecured debt? Examples of provable unsecured debt include medical and phone bills, credit card debt, personal loans and the shortfall from secured debts etc. What type of offers can I make? There are three main types of offers you can make; 1. Payments set out over a period of time, lump sum payments or a combination of both. 2. An assignment of an asset in place of the debt (property). 3. Placing your business in the hands of an administrator, who continues to run it for the benefits of the creditors. Do all creditors have to agree to my proposal? No, not all creditors have to agree. If the majority in number (51%) and more than 75% of the dollar value, of those who decide to vote, vote yes, then your proposal is accepted and all creditors in the proposal are bound by it. This includes the creditors who didnt vote or even voted no. Can you guarantee that it will be accepted? No, it would be unprofessional to make such a guarantee. It is your creditors 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 full and complete disclosure of your financial position, put forward the best offer you can and commit to complying with the terms of the agreement. This is the best way to ensure you are doing everything you can for your agreement to be accepted. Where do I find a trustee? There are a number of trustees available to handle a PIA, however it is important that you find the right one for you. Credit Repair Australia can help you find a registered trustee. Who is ITSA? The Insolvency and Trustee Service of Australia (ITSA) is the government body responsible for reviewing and facilitating Personal Insolvency Agreements and other matters. Will a Personal Insolvency Agreement affect my credit rating? Yes, a Personal Insolvency Agreement is listed on the National Personal Insolvency Index (NPII). Some credit reporting agencies may access the NPII and list the agreement on your personal credit file. Do I pay my unsecured creditors whilst I wait for 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 fairly. It is important to pay your secured creditors (like mortgages etc) otherwise you run the risk of that asset being repossessed. Are there any fees? Your trustee may receive a fee, the Government department ITSA may also receive a fee. Credit Repair Australia and/or its associated entities may also charge a fee which may be up front and/or ongoing. What if my creditors continue to call? If your creditors continue to pressure you for payment, simply advise them that you are attempting to propose an arrangement with Credit Repair Australia and if 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 the voting dates of your creditors is approximately 35 days, however each case varies. What happens next? If accepted the creditors listed in the agreement can take no further action against you, provided you comply with the terms of the agreement.

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Personal Insolvency Agreement Process


The time between appointing Credit Repair Australia and the creditors voting date is approximately 35 working days, however each case may vary.
1.1 Consultant collects vital information and prepares a budget 1.2 Credit Repair Australia reviews position & budget and prepares all documents for the trustee

2.1 Controlling trustee is appointed

2.2 Meeting of creditors is held (you must attend)

2.3 If more than 50% of the creditors who decide to vote, with more than 75% of the dollar value vote yes, your proposal is accepted

2.4 Once you have met the terms of your proposal you are now released from all of those debts

3.1 If 50% or more of the creditors who decide to vote with 75% or more of the dollar value vote no, your proposal is not accepted 3.3 Another option may be proposed

3.2 Your situation may be reviewed

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Formal Options Bankruptcy


Bankruptcy is a process where people, who cannot pay their debts receive the protection of the Bankruptcy Act and may hand over control of their assets to a trustee in attempt to resolve their financial affairs. There are two main ways to be made bankrupt; declaring yourself bankrupt or being made bankrupt by a creditor. Bankruptcy is an option if you are unable to come to any arrangement to satisfy your unsecured creditors. Bankruptcy is the right option for some, however many people who are eligible for a Debt Agreement decide to enter one because of the number of benefits that Debt Agreements have over bankruptcy. Bankruptcy may release you from your debts, however you need to be aware 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 affected, especially in handling money or where a licence is required (e.g. security industry or licensed builder) There are some debts that you may not be released from You may be required to make monetary contributions to your creditors if your income exceeds a certain level. Your bankruptcy may be rejected by the Insolvency and Trustee Service of Australia (ITSA) However bankruptcy can offer many benefits to those with no other option.

Frequently Asked Questions


How long does bankruptcy last? Bankruptcy usually lasts 3 years, however this period may be extended up to 8 years through an objection by the trustee. Why would I become bankrupt? You would usually become bankrupt if you had no other option to resolve your debt, or your creditors force you into bankruptcy. What happens to my debt? After your bankruptcy you are discharged from all your provable debts.

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What is a provable debt? A provable debt is a debt for which a claim can be made in your bankruptcy. What if someone has guaranteed some of my debt? Bankruptcy does not affect the rights of a creditor to claim under a guarantee. The creditor is entitled to recover payment from the guarantor as per their original agreement. What happens if I incur debt after bankruptcy? You will be responsible for any debts incurred by you after bankruptcy. Can my creditors still contact me for payment after I become bankrupt? No. The Bankruptcy Act prevents creditors from receiving money from you. If your creditors contact you for payment you should contact your trustee immediately. However if you have made arrangements to retain secured property such as your house this is an exception. Can I continue to use my credit cards? It is up to the credit provider of the card whether they are prepared to extend credit to you. However, they will be notified of your bankruptcy. What if I forgot about a debt at the time of becoming bankrupt? If you forget about a debt and remember it later, you should contact your trustee as soon as possible so that it may be added to your list of creditors. Failure to disclose debts could extend your bankruptcy to 5 years. Therefore it is important that you list all your creditors in your statement of affairs. Will I lose my car or other assets? Once bankrupt you can no longer sell or deal with most of your assets or items of value. Your trustee can sell your property for the benefit of the creditors. Some assets that are protected under bankruptcy and cannot be sold by your trustee include; necessary household furniture, personal effects, limited tools of trade, life 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, however the trustee must act in the best interest of the creditors. If you are eligible you might be able to utilise a Debt Agreement or Personal Insolvency Agreement as a way of protecting your house or other assets.

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Who is ITSA? The Insolvency and Trustee Service of Australia (ITSA) is the government body responsible for reviewing and facilitating Bankruptcies. How does bankruptcy affect my employment? If you are engaged in particular trades or professions there may be certain restrictions imposed by professional associations or licensing authorities. If you fall in this category you should contact your professional association or licensing authority to confirm whether there is any effect on your membership or ability to practice a particular trade. Do I need to make contributions/payments from my income? If your income exceeds the threshold amount you may have to make compulsory contributions to your trustee. However there are certain circumstances where you may benefit from voluntary contributions. What happens to any assets that have not been sold after I am discharged? Those assets are not returned to you. The trustee may sell such assets after the date of discharge. When are my creditors notified of my bankruptcy? They are notified in writing as soon as possible by the trustee and informed of the assets and liabilities disclosed by you on your statement of affairs. What are my rights and responsibilities once bankrupt? Borrowing Money - It is an offence to borrow over a certain limit unless you inform the person that you are dealing with that you are an undischarged bankrupt. Operating a Business - You can still operate a business while bankrupt. If you trade under an assumed name or business name you will have to disclose your bankrupt status. However you cannot be a director of a company. Change of Name, Address and Overseas Travel - You are required to notify your trustee of all changes of name and/or address. If you wish to travel overseas you must obtain the written permission of the trustee administering your estate who may impose conditions of 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 examination before the official receiver or the court. Are there offences under bankruptcy? Yes. Examples include; disposing of assets before bankruptcy, failure to disclose assets, obtaining credit whilst insolvent, incurring debts over the set limit whilst in bankruptcy, leaving Australia without the permission of the trustee and more. Penalties for these offences are up to 3 years imprisonment. Will bankruptcy affect my credit rating? Bankruptcies are listed on the National Personal Insolvency Index (NPII). Some credit reporting agencies may access the NPII and list your bankruptcy on your personal credit file. What happens to my ABN when I am bankrupt? Your trustee will notify the deputy commissioner of taxation of your bankruptcy. If you wish to continue to use the ABN you will need to contact the tax office and have your ABN reactivated. You will still be responsible for lodging your BAS statement regardless of bankruptcy. What if I get a tax refund? If the tax office is a creditor, they may keep the refund as an offset to the amount owing. Refunds from income earned before bankruptcy can be claimed by the trustee. Refunds from income earned whilst bankrupt are treated as income and may affect your compulsory contributions. What if I transferred my house or any other asset of value to someone elses name prior to bankruptcy? The trustee has the power to void transactions made within 5 years prior to the bankruptcy. The trustee will investigate the transfer and may recover the asset if the transfer was to defeat creditors or if the payment for the asset was less than the market value or if it was a preference to other creditors. Are there any fees? Yes, we may charge you a fee as may your trustee and/or the government. To find out more please call our head office on 1300 304 352.

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

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Bankruptcy Process
The time taken to complete this process is approximately 28-35 days, however each case varies.
1.1 Consultant collects vital information and prepares a budget 1.2 Credit Repair Australia reviews position & budget and prepares all documents for the trustee

2.1 Documents are either sent to you for signing or forwarded to a trustee

2.2 Your trustee receives and reviews the information

3.1 Your documents are lodged with ITSA

3.2 If accepted for processing, you are now bankrupt

Case Study - Bankruptcy


Melanie Steinford was having trouble paying back her personal loan and her credit card. Melanie owed approximately $27,000 in total and her hours had been reduced at work. The Solution Melanie approached Credit Repair Australia as she needed assistance with her options. Credit Repair Australia compiled a detailed budget for Melanie and concluded that she did not make enough money to have a Debt Agreement accepted. Melanie decided to become bankrupt. The Outcome Credit Repair Australia assisted Melanie with her Bankruptcy, a trustee was appointed and Melanie became bankrupt.

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Credit Repair Australia Pty Ltd Postal Address: Web: Email: ACN: P.O. Box 392 Moorebank NSW 1875 Australia www.creditrepairaustralia.com Enquiries@drcapital.com.au 120 248 311

Who to Contact
New Clients If you have not yet seen a consultant please call our customer coordinator team. If you have seen a consultant and now wish to proceed please call them directly. Alternatively you may call our head office. All other enquiries For all other enquiries including; credit repair updates, informal arrangements, debt agreement enquiries, payments and creditor enquiries please phone our head office..

1300 349 273 (1300 FIX CREDIT)

1300 304 352

1300 304 352

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This booklet and all information contained within is copyright to Credit Repair Australia Pty Ltd. All rights reserved. ACN: 120 248 311. The redistribution, copy, reproduction or un-authorised use of this booklet, its material and/or content is not permitted without prior written consent.

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