Can I have a bank/cheque account?

In most cases, yes, with the agreement of the financial institution. However, any substantial funds accumulated in a bank or similar account may vest in the trustee as an after-acquired asset.

How does Bankruptcy affect my employment?

Your bankruptcy may prevent you from undertaking employment in certain occupations or holding various licences. We advise that you contact any professional bodies that you are registered with to ensure that there are no restrictions in continuing your employment in the event that you become bankrupt.

Your employer is not normally notified of your bankruptcy unless you owe him/her money or unless you have failed to pay compulsory contributions. It is still your responsibility to lodge taxation returns.

Do I have to make payments from my income to the Trustee?

One effect of bankruptcy is to take the pressure off you to make payments to most of your creditors. If you earn an income above an indexed statutory amount you are obliged to make regular payments or "contributions" to the trustee for the benefit of creditors. As contributions are enforceable at law if payments are not made voluntarily the trustee can issue a notice on your employer to garnishee your income.

It is an offence for an employer to dismiss a bankrupt because the trustee has issued the employer with a notice to forward payment from the bankrupt's wages. In order to assess the contribution payable, a bankrupt's income is broadly defined to include money received from their employer and any other benefit, for example the private use of a motor vehicle or subsidised housing. Other factors are then considered and include the amount of income tax payable, maintenance payable, and the number of your dependants whose seperate income is less than $2,500 (indexed).

What if I leave my employment during Bankruptcy?

Should you terminate your employment during the period of your bankruptcy any lump sum termination payments due to you will be claimed by your trustee.

What happens to any assets that have not been sold by the trustee at the date of my discharge?

Your discharge from bankruptcy does not return those assets to you. The trustee may sell such assets after the date of your discharge.

Can my Bankruptcy be cancelled or annulled?

If you strive to pay your debts your bankruptcy may be annulled. Your trustee can issue a certificate of annulment when:-

• all your debts and costs of administration of your bankruptcy have been paid in full, or
• you make an offer of composition which is accepted by your creditors. A composition is an offer of a sum of money in full and final payment of your debts and it must be accepted by your creditors at a meeting and you must satisfy the terms of the offer; or
• through your trustee you enter into an arrangement with your creditors where you offer to pay a sum of money over a period of time which is accepted in full and final settlement of your debts when payment is completed.
• if you believe that you should never have been declared bankrupt, you can make an application to the Court (either Federal Court or the Federal MAgistrates Court) to have your bankruptcy annulled under Section 153B. You will need to satisfy the Court that the bankruptcy should not have been made.
  

What are my rights and responsibilities once Bankrupt?

Borrowing Money

When you are borrowing money, purchasing goods on credit or incurring credit in any way exceeding $3,973 (indexed) it is an offence unless you inform the person you are dealing with that you are an un discharged bankrupt.

Operating a Business

You can still operate a business while bankrupt. If you trade under an assumed name or business name either as a sole trader or in partnership, you have to disclose to all, your bankrupt status. You cannot be a director of a company or be involved in its management without the permission of the Court. (Corporations Law).

Change of Name, Address and Overseas Travel

You are required to notify your trustee of all changes of name and/or address. If you wish to travel overseas you must obtain written approval of the trustee administering your estate.

When are the creditors notified of my bankruptcy?

The creditors are notified in writing as soon as possible by the trustee and informed of the assets and liabilities disclosed by you on your statement of affairs.

Is my Bankruptcy advertised?

Generally no, however your trustee may choose to do so.

Will I have to appear in Court?

Your trustee will decide whether there are matters requiring examination before the Official Receiver or the Court. If, for example, investigations into your affairs are needed you may be required to attend an examination or an interview.

Are there offences under Bankruptcy?

Yes. The most important are listed below:-

• Disposing of property before bankruptcy with intent to defeat your creditors
• failure to disclose assets
• the deliberate obtaining of credit when you know you cannot pay
• gambling and speculation which results in bankruptcy
• incurring debts during bankruptcy for over $3,973 (indexed) without disclosing that you are bankrupt
• operating a business under an assumed name, without advising your bankruptcy leaving Australia without the trustee's permission
• The penalties for these offences vary from 6 months to 3 years imprisonment upon conviction.
  

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