The Effect of Bankruptcy on a Debtor:

Bankruptcy affects different people in different ways. Bankruptcy comes with serious consequences. Understanding how bankruptcy works and what to expect will help you decide if it is the right move for you. However, please note that when you become bankrupt…

1 You must comply with all requests made by your trustee
2 If you are in business and trade under a business name different to your own, you must tell everyone you deal with that you are bankrupt. If you don’t, you may be subject to criminal prosecution.
3 You must supply all books, bank statements and other documents that the trustee asks you to supply. Your bank accounts will/may be monitored
4 Some banks may not let you operate an account or may restrict how you can use your account.
5 If you move house, you must tell the trustee in writing immediately. You may find it hard to rent and get electricity, water or a telephone connected without paying a bond.
6 You must tell the trustee if your income increases
7 You must return a completed statement of income form each year if asked to do so by the trustee
8 You will be liable for certain debts after your bankruptcy ends (eg child support, court fines, non-court fines, HECS/HELP debts, debts incurred by fraud)
9 You cannot go overseas without obtaining the trustee’s permission in advance and pay an overseas travel application fee.
10 Your name and bankruptcy details will appear on the National Personal Insolvency Index (NPII) forever
11 You need to disclose your bankruptcy if you ask for any form of credit more than the Indexed amount
12 You must tell the trustee immediately if you win any money or other prizes
13 You must tell the trustee immediately if you get any new assets. You cannot conceal, remove or dispose of any property inside or outside Australia. If you do, you may be subject to criminal prosecution.
14 You must tell the trustee immediately if you become the beneficiary of a deceased estate
15 If you forget to disclose any assets you must advise your trustee immediately. Any intentional omission is an offence
16 If you forget to disclose any creditors on your SOA, you must advise the trustee immediately. Any intentional omission is an offence
17 If any of your creditors hold valid security over any property and they take action to recover it, you must assist
18 You must surrender your passport to the trustee if you’re asked to do so
19 You will remain liable for debts incurred after the date of your bankruptcy
20 You cannot act as a director/manager of a company, without the court’s permission
21 You cannot administer a trust account (eg as a solicitor or accountant)
22 If your after-tax income is above the Indexed amount, you will need to make payments from your income to your bankrupt estate
23 You must fully and truthfully disclose to the trustee all of your property and its value. Any intentional omission is an offence
24 If you enter into a hire purchase agreement or a contract for the hiring or leasing of any goods whereby the amount exceeds and indexed amount, you must tell the seller or the property owner you are bankrupt.
25 You must not dispose of any property belonging to the trustee. If you do, you may be subject to criminal prosecution

 

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