In the 2011- 2012 financial year so far, over 2200 new cases of bankruptcy have been lodged in Australia. Increasing financial stress, credit card debt, personal loans and an unstable employment market, have greatly contributed to the bankruptcy declarations within Australia.
Bankruptcy occurs when an individual does not have enough money or assets to pay their debts, and can only be entered into by a formal process. Only individuals can be declared bankrupt – when a company enters a similar state it is termed ‘insolvent’ and may face liquidation.
The period of a bankruptcy is generally 3 years and one day from the date a Statement of Affairs is filed or from the date of bankruptcy as determined by the Court, although this period can be extended to 5 or even 8 years upon objections being lodged.
There is a permanent record of your bankruptcy on the National Personal Insolvency Index (an electronic public register which can be accessed by anyone for a small fee). Bankruptcy and other serious credit infringements are recorded for 7 years. You name will be listed for 7 years from the commencement of your bankruptcy even if your bankruptcy has been discharged. Lenders may limit your ability to borrow money or buy things on credit. You may also find it hard to rent, or get electricity, water or the telephone connected, without paying a bond. It is an offence if you do not inform any relevant party that you are a bankrupt.
Bankruptcy generally does not prevent you from working. Your employer is not normally notified of your bankruptcy, unless you owe him or her money. If you are engaged in particular trades or professions there may be certain restrictions imposed by professional associations or licensing authorities. You should contact your professional association or licensing authority to confirm whether there is any effect on your membership or ability to practice a particular trade.
Always seek help and advice from a professional. 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 or call us on 1300 QUINNS (784 667).