Consequences Of Bankruptcy
Bankruptcy can provide relief if you are unable to repay your debts, however there are consequences which may affect you.
What is bankruptcy?
Bankruptcy is a legal process which offers protection to people who are unable to pay their debts. A person can voluntarily declare bankruptcy at any time or be made bankrupt on the application of a creditor to the Courts.
Once bankrupt, a Registered Trustee is appointed to look after your bankruptcy.
Once bankrupt, a Registered Trustee is appointed to look after your bankruptcy.
A Trustee will manage your bankruptcy
A trustee is the person or entity that manages your bankruptcy.
You may ask a registered trustee to administer your bankruptcy.
A creditors can change your trustee.
You must assist your trustee at all times.
You must notify the trustee of any changes in your personal circumstances.
You may ask a registered trustee to administer your bankruptcy.
A creditors can change your trustee.
You must assist your trustee at all times.
You must notify the trustee of any changes in your personal circumstances.
Bankruptcy may affect your income, employment and business
If you earn over a set amount:
You may need to make compulsory payments to your trustee.
For more information see: Income & Contributions
There may also be some restrictions on your employment:
Some professional or licencing bodies impose restrictions in some trades or professions.
For more information see your Hr department, licensing body or Fair Trading and ask if restrictions apply.
Running a business.
You may need to make compulsory payments to your trustee.
For more information see: Income & Contributions
There may also be some restrictions on your employment:
Some professional or licencing bodies impose restrictions in some trades or professions.
For more information see your Hr department, licensing body or Fair Trading and ask if restrictions apply.
Running a business.
- You can operate as a sole trader. However your business name should contain your full name. If your business name doesn't contain your full name, you must tell all people you do business with that you're bankrupt.
- You can't manage a trust account e.g. as a solicitor or accountant.
- You can’t be a director of a company or manage a company unless you have the permission of the court.
- You may not be able to hold certain public positions (e.g. senator or member of parliament).
Bankruptcy does not release you from all debts:
Most unsecured debts are covered in bankruptcy - this means you no longer have to repay these debts.
However this debts listed below are not covered by bankruptcy.
However this debts listed below are not covered by bankruptcy.
- Court imposed penalties and fines
- Child support & maintenance
- HECS & HELP debts (government student loans)
- Debts you incur after your bankruptcy begins
- Unliquidated debts (e.g. a debt where you and your creditor are yet to determine the amount). We can assist you with unliquidated debts.
Traveling Overseas
You must request permission from your trustee to travel overseas.
Please allow at least 2 weeks for this approval. Urgent cases and be approved sooner. It will depend on the trustee.
Please allow at least 2 weeks for this approval. Urgent cases and be approved sooner. It will depend on the trustee.
Your name will permanently appear on the National Personal Insolvency Index (NPII)
The National Personal Insolvency Index is a paid fee searchable public register listing insolvency proceedings in Australia. You will NOT be listed on google or any search engine. Someone will have to pay a fee to find out if you are bankrupt.
Some other information that may appear on the register are:
If your safety is at risk, you can request to hide your address from the National Personal Insolvency Index (NPII).
Some other information that may appear on the register are:
- Name, date of birth, residential address and occupation that you disclose on your application.
- Any previous names and aliases, if known.
- The type of proceeding, the start date and the bankruptcy administration number.
- The name and contact details of the trustee or administrator.
- The current status of the proceeding e.g. whether you're discharged from bankruptcy.
If your safety is at risk, you can request to hide your address from the National Personal Insolvency Index (NPII).
Future Credit
If you apply for credit over a set amount, you must inform the credit provider of your bankruptcy.
Credit reporting agencies keep a record of your bankruptcy for:
Credit reporting agencies keep a record of your bankruptcy for:
- 5 years from the date you became bankrupt or
- 2 years from when your bankruptcy ends, whichever is later.
Your trustee may sell your assets
You are able to keep:
You must declare any assets you have when you apply for bankruptcy and any you receive during bankruptcy.
- 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.
You must declare any assets you have when you apply for bankruptcy and any you receive during bankruptcy.
Legal Action
If you're involved in any legal action, you need to inform your trustee.
If you have a pending court case, you should contact the court to confirm whether you must still attend.
If you have a pending court case, you should contact the court to confirm whether you must still attend.
Bankruptcy Term
Normally lasts for 3 years and 1 day from the day you file your statement of affairs. This starts from the day the trustee accept your bankruptcy application.
Need more information
We answer most frequently asked questions we receive, please click on Frequently Asked Questions button below.
If you can not find the answer to a specific question, please reach out to us, where a consultant will personally answer your question.
Remember this is an obligation free services.
If you can not find the answer to a specific question, please reach out to us, where a consultant will personally answer your question.
Remember this is an obligation free services.
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