You will manage the bankruptcyA Bankruptcy Trustee is the person or entity that manages your bankruptcy.
A Bankruptcy Trustee is obligated to work under strict regulatory guidelines, in accordance with the Bankruptcy Act, 1966 (“the Act”) and are bound by the provisions of the Act in administering your bankrupt estate. The Australian Financial Security Authority (“AFSA”) oversees regulation and enforcement of the laws encompassed within the Act.
A Bankruptcy Trustee will work with you, and your creditors, to achieve a fair and reasonable outcome for all.
During the period of bankruptcy, and under the terms of the Act, a bankrupt has an obligation to provide certain information to their Bankruptcy Trustee, including changes to their circumstances. This may involve supplying books, bank statements and any other documents that their Bankruptcy Trustee requests to assist with their statutory obligations and their investigations into your affairs, leading up to, and during the bankruptcy.
The Bankruptcy Trustee will either be:
- A Registered Trustee that the bankrupt appoints; or
- The Official Trustee if the bankrupt does not appoint a Registered Trustee.
Bankruptcy may affect your income
If a bankrupt earns income over a set amount, they will be required to make compulsory payments to their bankrupt estate.
Please see the Bankruptcy Information: Income & Employment for more information.
Bankruptcy does not release you from all debtsMost unsecured debts are covered in bankruptcy - this means you no longer have to repay these debts. There are some exceptions which include:
- Fines and penalties such as speeding fines;
- Cost order for a matter not resolved at the date of bankruptcy; and
- Debts to Centrelink for overpayment of entitlements.
It affects your ability to travel overseas
A bankrupt must request permission from their Bankruptcy Trustee to travel overseas.
On the majority of occasions, the Bankruptcy Trustee will grant the request to travel.
Bankrupt’s name will permanently appear on the National Personal Insolvency Index (“NPII”)
The NPII is a searchable public register listing insolvency proceedings in Australia.
Bankruptcy can affect credit file
Credit reporting agencies keep a record of an individuals bankruptcy for:
- 5 years from the date of bankruptcy; or
- 2 years from when the bankruptcy ends, whichever is later.
Bankruptcy Trustee may realise assets
A bankrupt is able to keep the following:
- ordinary household goods;
- tools up to a set amount used to earn an income; and
- vehicle(s) with a value up to a set amount.
Period of Bankruptcy
The period of bankruptcy generally lasts for 3 years and 1 day from the day on which the bankrupt files their Bankruptcy Form (formerly known as “Statement of Affairs”).
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