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Can I avoid bankruptcy ?

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Can I avoid bankruptcy ?

Postby dontknowwhattodo » Sat, 02 Apr 2016 12:54 pm

Need some guidance from friends who have any experience.

I am an expat who has been running a business for around 5 years now. In 2014 had some financial trouble with the business and I took a personal loan to pay my staff. The bank put forth a bankruptcy application against me in 2015 when I defaulted in payments.

The high court however allowed 3 adjournments as I set up an arrangement with the bank to pay them va installments. I have been paying them since then. Last month my installment got delayed by a couple of days( I made the payment but after 3-4 days of the end of the month ) and the bank has said they will be asking the court to make me bankrupt in the next hearing.

A summary of my case -

1) The initial amount when they applied for bankruptcy was $23,000
2) I set up an arrangement with the bank to pay them $2000 every month. The bank got the court to adjourn the hearing 3 times to allow me to pay up.
3) I got delayed in making my last payment by a few days.
4) Now after all the payments, the amount is reduced to $8000. So if I pay them $8000 in full before the next hearing ,they will withdraw the case.
5) The next hearing on the case is in 1 weeks time.
6) I have invoices to the tune of $10K that my clients would be paying in 3 weeks time.

However the bank has told me that they will be proceeding with asking the court to make me bankrupt. They have given me the option to either settle in full or become bankrupt. They are not keen to give me any more time. Since I am a director of a company, the DRS scheme won't apply to me and I would be made an instant bankrupt.

A few questions that come to my mind, that I will need advise on -

1) Can I be made bankrupt if I owe only $8000 to the bank ? Initially it was $23,000. The amount got reduced as I have been paying.
2) I am 100% sure that I can pay the remaining $8000 in 3 weeks time as my funds are coming in. Is there anything I can do to get the hearing adjourned by a month or so?


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Re: Can I avoid bankruptcy ?

Postby therat » Sun, 03 Apr 2016 12:59 pm

Have you settle your loan shark debt?

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Re: Can I avoid bankruptcy ?

Postby PNGMK » Mon, 04 Apr 2016 9:08 am

No one wants to bankrupt you if you can pay something. Bankruptcy means they lose out completely. They will negotiate.
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Re: Can I avoid bankruptcy ?

Postby livingontheedge » Mon, 04 Apr 2016 2:51 pm

Well to file for bankruptcy you must have atleast $10,000 in debts and the whole process takes about 4 to 6 weeks. Thus even before the bankruptcy process is completed, you may have already settled the debts to the creditors and this process would become redundant. I would suggest you show the invoices due and the commitment (via email correspondence) of the customers to settle this invoice due in 3 weeks time to the court and creditors.

In the event the bankruptcy proceedings is completed (lets assume here everyone is unreasonable and does not believe you) but you are able to pay off the debts due to the creditors soon after, you could make an application to obtain an annulment of the bankruptcy order.

Do kindly take note there is a possibility the banks would charge you for the legal fees incurred to arrange for the court order and correspondences.

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