Obligations of a Bankrupt to disclose
Although everyone should know that a Bankrupt has to disclose all their financial affairs including debts, income and assets to a Trustee in Bankruptcy, some bankrupt’s still try to avoid doing so and end up with significant consequences including the extension of the bankruptcy period.
A recent appeal to the AAT confirmed the obligations of a bankrupt to disclose ALL their financial resources.
The Bankrupt failed to disclose certain accounts to the Trustee in Bankruptcy so when the 3 year bankruptcy period was coming to an end the Trustee objected to the release of the Bankrupt citing the examples of where the Bankrupt failed to disclose.
The delegate of the Inspector General reviewed the Trustee’s objection and determined that the objection by the Trustee was valid and the Bankrupt was not released from bankruptcy.
The issue was whether the Bankrupt had failed, whether intentionally or not, to disclose to the trustee his beneficial interest in property.
The Bankrupt had access to an account which had approximately $84,000 as at his date of bankruptcy and the Bankrupt withdrew monies from that account shortly after being declared bankrupt over a period of several months so that the account ended up having a zero balance and was closed.
Further the Bankrupt used an alias and received monies into an account of the alias, something he did not inform the Trustee of.
The AAT found that the Inspector General had correctly determined that the Trustee had grounds to extend the bankruptcy period as the Bankrupt had not fully cooperated with the Trustee in its investigations
The objection to the Bankrupt’s discharge serves the purpose of requiring the Bankrupt to co-operate more fully with the Trustee in his administration and to fully and frankly disclose matters to the Trustee and, further, that that obligation would be significantly reduced if the Bankrupt were discharged from bankruptcy.
People should not take the responsibility to disclose to a Trustee lightly as the implications for not doing so can impact on the period of your bankruptcy.
If you have any queries in relation to the above, please contact our team at The Quinn Group or submit an online enquiry form today.