Declaring Personal Bankruptcy in Australia
Bankruptcy is often seen as the last resort for people struggling with severe debt. There are a number of Bankruptcy regulations in place to deter people from declaring Bankruptcy as well as common misconceptions, but in some cases, the benefits of eliminating your debt will outweigh the potential restrictions temporarily imposed on your lifestyle.
At Revive Financial, we’re personal Bankruptcy specialists. Our team consists of fully qualified Chartered Accountants and Registered Bankruptcy Trustees. With years of experience, we have the skills and knowledge required to see you through your entire Bankruptcy process – from start to finish.
What is Bankruptcy?
Bankruptcy is the legal process where you declare you’re unable to repay your debts. In other words, you are deemed personally insolvent. A Registered Bankruptcy Trustee is appointed to your estate who will sell your assets to pay down your debts.
When declaring Bankruptcy, you have the option to choose your Bankruptcy Trustee. Engaging our in-house private Registered Bankruptcy Trustee provides you with the opportunity to:
- Discuss your situation prior to being made Bankrupt,
- Understand what’s involved during the Bankruptcy,
- Gain comfort in the process, and
- Make informed decisions based on the professional advice provided that may suit your financial needs.
3 Easy Steps to Declare Bankruptcy
Talk to a Professional
Lodge Bankruptcy Forms
Confirm Bankruptcy Number
Bankruptcy shouldn’t be seen as a punishment. Instead, it’s an opportunity for you to wipe the slate clean and start over. There are, however, a number of restrictions and regulations involved in personal Bankruptcy that you need to be aware of.
Bankruptcy and Your Income
When you declare Bankruptcy, there will be a threshold placed on your income. If you earn over the threshold amount, 50c in every dollar will be taken from you and used to pay Bankruptcy costs or divided among your creditors. If you earn less than the threshold, Bankruptcy won’t impact your income.
Bankruptcy and Travel
If you need to travel overseas while Bankrupt, you will need to apply through your Trustee. There is a non-refundable $150 application fee and a judge will approve or deny the application.
Bankruptcy and Your Credit File
Currently, Bankruptcy is noted on your credit file for a total of 5 years. If your Bankruptcy is extended for any reason, it will stay on your credit file longer (can be up to 8 years). Your name will also be noted on the National Personal Insolvency Index (NPII) for life.
Bankruptcy and Your Assets
In Bankruptcy, you’ll be able to keep property such as personal items, household furniture, tools and equipment for work, a car (up to a certain value) and your superannuation. Unfortunately, a Bankrupt is not legally allowed to own property – but there are ways you can keep it, depending on your situation.
Worried about how Bankruptcy will affect you? For more information, get in touch with us today to arrange a confidential consultation to discuss your options.
What Happens After Bankruptcy?
Bankruptcy has regulations and restrictions, but after you declare Bankruptcy you can still:
- Travel overseas with permission from your Bankruptcy Trustee
- Keep trading as a sole trader
- Own a car up to a certain amount
- Earn as much as you like, but you will be required to pay income contributions towards your bankrupt estate if you earn over a certain amount
- Retain your home (under certain circumstances)
When Bankruptcy is Right For You
Bankruptcy should be considered a last resort. During your initial free 30-minute consultation with us we will determine if Bankruptcy is necessary for your situation – or if there is an alternative debt relief solution available. Some alternative solutions include an informal Debtstroyer Agreement or a formal Part 9 Debt Agreement.
Once we’ve assessed your financial situation and recommend the best way forward, you can make an informed decision about which debt relief solution is best for your circumstances.
What Makes Us Great
In-house ASIC Registered Liquidator
In-house ASIC Registered Bankruptcy Trustee
CPA and CA Qualified Accountants
Professional Members of TMA
Professional Members of ARITA
Rated 4.9 out of 5 on Trustpilot
Not sure if Bankruptcy is the right option for you? Get in touch with our debt specialists today to have your questions answered.
Bankruptcy Frequently Asked Questions
Generally, Bankruptcy lasts for three years. However, depending on your circumstances, it can last for five or eight years.
Once you are Bankrupt, your name will be listed on your credit file for 5 years and on the National Personal Insolvency Index (NPII) for life.
The minimum amount of debt in which a Bankruptcy notice can be issued is $5,000. You should consider the Bankruptcy regulations and consequences involved before you decide to declare it. If you are only struggling with a small amount of debt, the impact Bankruptcy has on your life may outweigh the benefits of eliminating the debt.
Filing for Bankruptcy is the act of declaring to your creditors you don’t have enough money to repay the debts you owe. So when you file for Bankruptcy, a Bankruptcy Trustee is assigned to you to enforce a number of restrictions. These include taking possession of and selling your assets, garnishing your wages and limiting overseas travel.
This is all done in a bid to recover some of the money you owe to creditors. When the bankruptcy period is over, your debts are considered to be settled and creditors cannot pursue you for further payment of these debts.