Frequently Asked Questions

Please find below answers to some of the most common questions we receive.

Q.  What is Bankruptcy?

• Bankruptcy is a solution backed by Government legislation to enable people who are unable to pay their debts when they fall due.

Q.  What is the process?

• There are two ways that an individual can go bankrupt.
• You can apply for bankruptcy by completing the relevant forms and submitting them to the relevant Government agencies.
• A creditor who is owed more than $2000 can apply to have you bankrupt through the court system.

Q.  Who can Apply?

• Australian residents who are currently residing in Australia and who are insolvent can apply for bankruptcy.
• There are no other criteria to prevent an individual from filing.

Q. How do I apply?

• You are required to lodge the relevant forms either directly to the Government agency or via a Registered Trustee.  These forms include a statement of affairs, a debtors petition and a confirmation from you understand the requirements and implications of bankruptcy.
• You will need to provide details of all creditors, including their addresses, and the amounts owing to each.  All debts for which you are liable must be included.  If you later discover that you neglected to include a debt, advise your Trustee immediately to avoid penalties.

Q.  How long will I be bankrupt?

• The minimum term for bankruptcy is three years from the date that you submit your statement of affairs document.  This period can be extended by your trustee if an objection is raised.
• Extensions can be granted to either five years or eight years under certain circumstances.
• If you fulfill all your obligations under the act, your bankruptcy is unlikely to last more than three years.

Q.  Will I be required to attend court?

• If you fulfill all your obligations there is no likelihood of ever having to attend court.

Q.  What happens once I am declared bankrupt?

• Your creditors are not permitted to take action to recover dents owing except in a few situations:
  • Court imposed fines
  • HECS debts and some Social Security debts
  • Child maintenance orders
  • Debts that have been incurred due to fraudulent activity
  • Council rates
• Secured debts can be recovered by creditors (e.g. they can sell your house to recover outstanding mortgage debt).
• Joint debtors are also liable for the debts unless they are declared bankrupt.

 Q.  How will bankruptcy affect my employment?

• There are no employment limitations apart from those listed below.
• As a bankrupt, you will not be eligible to hold a position of company director of a company without court approval.
• There are certain jobs that you will not be able to apply for.  These include jobs such as Police Officer and Security Guard.
• You will also not be able to apply for certain licenses.

Q.  Am I permitted to travel overseas?

• You will need to lodge an application in writing with your Trustee well in advance of any plans to travel overseas.  You may travel overseas if your Trustee agrees.
• If you are required to make compulsory contributions, you may be required to seek permission of the court.

Q.  What my credit rating be affected?

• Your bankruptcy will be recorded in your credit history for a period of 7 years.
• This could affect your ability to get credit or to apply for loans.

Q.  What happens after bankruptcy?

• Once you have met all your obligations under your bankruptcy you will be discharged of all provable debts.
• There can be no more claims on unsecured debts.
• You will be free to begin a new life debt free.

Q.  What happens with debts I incur after bankruptcy?

• You will be required to pay back all these debts.

 Q.  Where can I get more information?

• You can get more information by calling us on 1300 991 039
• Alternatively you can email us on service@bankruptcygroup.com.au or submit a contact form.