If you are having difficulties managing your personal debts, bankruptcy may be the best option for you to make a fresh start
Bankruptcy is a formal process that is in force for a period of three years and one day, and may be commenced voluntarily via a process called a ‘debtor’s petition’.
Upon commencement of your bankruptcy, you are discharged from the vast majority of your personal debts, which means relief from the pressure of managing payment plans and communicating with your creditors.
During the term of bankruptcy, the following considerations and restrictions apply:
- Your divisible property (i.e. your assets) is made available to the creditors of your estate; however you are usually able to retain some cash at bank, your necessary household furniture and effects, a motor vehicle (or equity in a motor vehicle) and tools of trade; however statutory limits apply to the value of these items
- You may be liable to pay income contributions during the term of your bankruptcy, depending on your level of income and whether you have any dependents
- You will need the consent of your Trustee in Bankruptcy before travelling internationally
- If you receive an inheritance or win lotto during your bankruptcy, these assets and funds are made available to your creditors
- Your name will appear permanently on the National Personal Insolvency Index
Despite the negative stigma associated with bankruptcy, the process is a way for an individual to move forward confidently, away from a past of unmanageable debt.
Below are the forms required for lodgement of a Statement of Affairs and a Debtor’s Petition with the Australian Financial Security Authority.
To speak with us further regarding whether Bankruptcy may be appropriate in your situation, please contact us on 08 9215 7900 for a cost and obligation free consultation.
