Bankruptcy Assistance

While bankruptcy is a necessity for some situations, it is a last resort and will come with some not so pleasant consequences. At Debt Savvy we do recommend that you do speak to us before you declare bankruptcy as there are various options that may be suitable before you make a serious decision like this.

Frequently Asked Questions

The act of going bankrupt is a legal process that can be declared when an individual cannot pay their debts. Here, in Australia Bankruptcy is governed by the Bankruptcy Act 1966 and is regulated by the Australian Financial Security Authority.

When you declare bankruptcy you give up control of your finances and assets to a Trustee who will provide you protection from legal action being taken against you by a person or entity to which you owe money.

As we said, depending on your financial situation there may be an alternative to bankruptcy such as an informal arrangement, debt consolidation, a mortgage refinance, a debt agreement or a personal insolvency agreement and you should talk to us to find the best solution for you and provide you with professional advice on whether you actually do need to go bankrupt.

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Becoming bankrupt doesn’t mean that you will be free from all debts. Here’s a few that you may have to pay:
  • Any fines or penalties imposed from the court / legal proceedings
  • Unliquidated damages from accidents e.g. car accidents may be an exemption
  • Student assistance/supplement loans and HELP debts
  • Any utility bills and house rental payments
  • Other debts that you may occur post being declared bankrupt
There are some assets that you may be able to retain and others that will may be sold as a result of bankruptcy. Generally however, when you become a bankrupt what you retain includes:
  • Any of your possessions that help you earn an income up to a set limit
  • The majority of your personal and household items
  • Your vehicles up to a defined limit
  • The majority of funds in a complying super fund
  • Centrelink payments should be protected

Some assets if over certain thresholds may not be protected and have to be sold or taken if you declare bankruptcy. This is not limited to, but includes:

  • Property including houses; apartments; land; business and any other real property

  • Any motor vehicles which may not be exempt / over the set limit

  • Shares or other investments

  • Your tax refund

  • Proceeds from inheritance you may have received before or during your bankruptcy

  • Lotto winnings

  • Assets that you may have a joint share in with another individual

However before you declare bankruptcy, seek professional advice to ensure you are clear on what you will and won’t be able to retain.

The simple answer is yes as it can affect your ability to hold certain licenses and working in various occupations. Your employer however is not normally notified of your bankruptcy unless you owe them money. You still will have to do a tax return

There are a number of things that declaring bankruptcy can affect.
  • Borrowing Money – If you borrow money, purchase any goods on credit or incurring credit in any way exceeding a set amount as part of your bankruptcy, this is an offence unless you inform the person you are dealing with that you are an undischarged bankrupt.
  • Operating a Business – While you can still operate a business while bankrupt,iIf you trade under an assumed name or business name either as a sole trader or in partnership, you will have to disclose your bankrupt status. You cannot be a director of a company or be involved in its management without the permission of the Court.
  • Change of Name, Address and Overseas Travel – You will have to make it known to the trustee of any changes of name or address and also receive permission to travel overseas as part of declaring bankruptcy.

Again, the simple answer is it will. Your name will be on the public record forever and will be on a commercial credit reference for 5 years even if your bankruptcy has been discharged. It is likely that creditors will also limit your ability to borrow from them.

As a result, you may find it hard to find a rental home, asked for bonds when connecting things like utilities and also find some banking institutions may not want to open accounts as result of the bankruptcy.

It will last 3-years unless the trustee objects to you being discharged which could see it extended for up to 5 more years.

Again, before you decide on a course of action be sure to get in touch and talk with us here at Debt Savvy. We’ve had years of experience in this space and will ensure that you take the best course of action.

Before you decide on a course of action be sure to get in touch and talk with us here at Debt Savvy. We’ve had years of experience in this space and will ensure that you take the best course of action.