What will bankruptcy mean for me?
Bankruptcy is the legal process that controls the affairs of those who are insolvent, meaning those people who are unable to pay all their debts as they are due. However, it is important to note that bankruptcy is not the inevitable result of all those who become insolvent.
Bankruptcy is usually administered by the office of the Inspector General in Bankruptcy and it usually lasts for three years but can be extended in certain circumstances..
The consequences of bankruptcy are serious. There will be a permanent record of your bankruptcy on the National Personal Insolvency Index (an electronic public register that can be accessed by anyone for a fee).
A trustee is appointed to administer the bankruptcy. The duties of a trustee are specified in legislation and trustees have to adhere to certain standards while administering your estate. In order to pay creditors, your trustee will:
• sell your assets, including those you acquire or become entitled to during your bankruptcy (although you will be able to keep certain types of assets)
• recover any income you earn over a certain limit
• investigate your financial affairs and may in certain circumstances recover property that you have transferred to someone else prior to your bankruptcy.
Will my credit report be affected?
Your credit report will be affected with your bankruptcy status. Commercial credit reporting agencies can keep a record of your bankruptcy on your credit report for 7 years. Any creditor wishing to obtain a copy of your credit report can request it from a credit reporting agency.
During and after your bankruptcy, you have certain obligations and face certain restrictions such as travelling overseas, applying for loans or act as a director or manager of a company.
For example, it is an offence to leave Australia without the written permission of your trustee and your bankruptcy can be extended. Your trustee will need to be satisfied that you have legitimate reasons for the proposed travel, for example as a condition of your employment or for compassionate reasons.
Your trustee may impose conditions when giving permission such as:
• the period of travel
• the date you are required to return to Australia, and/or
• that any income contributions (compulsory sums from your income to repay your creditors) that you have been assessed to pay are paid before you go.
Here at The Quinn Group, the dedicated team of Lawyers and Accountants at can assist you with advice and assistance for your bankruptcy needs. Contact us now by submitting an online enquiry form or call 1300 QUINNS or on +61 2 9223 9166.