Principles of Bankrupt
The law of bankruptcy is contained in the Bankruptcy Act 1966, [“the Act”] which applies throughout Australia. Only natural persons can be made bankrupt. When a person becomes bankrupt, most of their property is taken over by either a registered trustee or the Official Trustee. A trustee can take most of a bankrupt’s real estate and personal property situated in Australia or elsewhere, with some exceptions. A person will usually remain bankrupt for 3 years. Bankruptcy continues until discharge or annulment takes place. For some people, bankruptcy may be the best way to handle their debts. When considering bankruptcy, the advantages and disadvantages should be considered as well as all other options.
A Bankrupt Responsibilities
All bankrupts have certain responsibilities to their trustee during their bankruptcy. These include: supplying all relevant information to their trustee; informing their trustee of any change of name, address, employment or income; making contributions from their income when a trustee issues an assessment; handing over their passport 65 to their trustee and obtaining the permission of the Federal Court to travel overseas; disclosing their undischarged bankrupt status if applying for credit in excess of $5,155.00; (as at 20th March 2013); handing over all relevant books and documents if a business is bankrupt; ceasing to continue to be a director of a company or involved in the management unless first obtaining the court’s permission; not trading under a business or assumed name without disclosing their undischarged bankrupt status.
Making Your Bankruptcy an Easier Journey
Becoming bankrupt may be the best and not the worse action you can take to secure your financial security for the future. Believe it or not I have many clients who will tell you exactly that. They will tell you that Bankruptcy saved their life, their marriage and their business. I realise that it’s hard to believe and if you’re currently considering what your options are to remove the stress caused by the debts hanging over you that’s probably very hard to believe at the moment. Determining whether your bankruptcy journey is a smooth ride (and potentially profitable) depends on something I touched on very early on in this book. It all comes down to planning, to having a strategy and following the strategy through.