Bankruptcy
Going bankrupt is where people cannot pay their debts due to number of reasons (eg loss of employment, relationship breakdowns, health issues) seek relief through the use of the Bankruptcy Act.
BEFORE GOING BANKRUPT PLEASE SEEK FINANCIAL COUNSELLING TO ENSURE YOU FULLY UNDERSTAND THE CONSEQUENCES OF GOING BANKRUPT.
Who is eligible to go bankrupt?
There are no income, asset or debt limits for you when proposing bankruptcy
You must be personally be present in Australia or a resident of Australia,or have owned a house or business or carrying out a business in Australia at the time of lodgement.
What could prevent you from declaring bankruptcy
In the opinion of ITSA you are able to pay your debts within a reasonable time
You have previously been bankrupt 3 or more times in the last 5 years
What forms do you need to complete?
Debtors petition including an acknowledgement that you have read the prescribed information pertaining to bankruptcy.
Statement of affairs. This document is the same as used in a PART X and details your income, assets, deals and business dealings.
What happens next?
Once you have completed the above forms and signed and dated them you are required to send them to ITSA. Contact addresses are shown on the ITSA website.
How long does it take to become bankrupt?
Once ITSA accept the bankruptcy petition you become bankrupt and receive a bankruptcy number. A bankruptcy normally lasts three years from the date your statement of affairs is lodged with and accepted by ITSA.
Can creditors make me bankrupt?
Creditors can apply to bankrupt you for a debt of at least $5,000 and they have issued a bankruptcy notice requiring payment within 21 days.
What assets can I keep?
You can keep so called exempt assets
If I am buying an exempt asset under finance, can I keep it?
Yes but only if you continue to pay for it subject to certain limits
What assets can be sold or distributed by your trustee?
NOTE; these assets can be either in Australia or overseas and could be in your possession or held by somebody else.
If you own a share of these assets the trustee can sell your share. If the co-owner is not bankrupt the trustee can sell the asset to them but it must be at a market price.
The trustee will usually sell assets if there is a surplus after seeling costs have been covered
Debts you still have to pay during bankruptcy
Debts you still have to pay when your bankruptcy ends
Do I have to make any income contributions during bankruptcy?
Income contributions are based on your current level of income, whether or not you have dependants or whether you pay child support.
Income limits are reviewed every 6 months-see ITSA website for current limits.
Annulment of bankruptcy
This event occurs if the bankruptcy is cancelled before the end of the 3 year period.
and
Discharge of bankruptcy
You are automatically discharged 3 years after you enter bankruptcy unless the trustee bleives that you have failed to co-operate fully, in this case the bankruptcy can be extended to a maximum of 8 years
Croft & Gray 141 Osborne St., South Yarra Vic. 3141 Tel.: 03 98665552 , 1300 555 237 Fax: 03 9279 3981 E-mail: info@debtassist.com.au ABN: 38 102 199 682 ACN: 102 199 682 Debt Consolidation
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