Bankruptcy Assistance - Part 2
If you are in debt and are considering bankruptcy think before you act. Bankruptcy is a last resort and has serious consequences. There are various options to deal with unmanageable debts. Before you make any decision or take any steps talk to Fox Symes. There are alternatives.
Can a creditor still contact me insisting on payment once I have become Bankrupt?
No. The Bankruptcy Act prevents creditors from recovering money from you. An exception is a secured creditor with whom you have made arrangements to retain secured property. If other creditors attempt to recover money from you, you should advise them of your bankruptcy, and if they continue to insist you should notify your trustee.
Can I continue to use my credit cards after Bankruptcy?
It is a matter for the issuing bank or finance company as to whether they are prepared to continue to extend credit to you. All creditors at the date of bankruptcy should be listed on your Statement of Affairs and they will be notified of your bankruptcy. It is an offence for you to incur credit over a set limit without disclosing to the person you are dealing with that you are an undischarged bankrupt.
Can I have a bank/cheque account?
In most cases, yes, with the agreement of the financial institution.
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?
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.
Can my Bankruptcy be cancelled or annulled?
If you strive to pay your debts your bankruptcy may be annulled.
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 a prescribed amount (indexed) it is an offence unless you inform the person you are dealing with that you are an undischarged 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.
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.
Does bankruptcy affect my credit report?
When you become a bankrupt your name will be on the public record (NPII) forever. Your name will be on a commercial credit reference for 7 years even if your bankruptcy has been discharged. Lenders may limit your ability to borrow money or buy things on credit. You may also find it hard to rent a property, or get any utilities connected without paying a bond and some banks will not let you operate an account or will restrict how you can use your account. If you have any queries regarding your credit report you should contact Veda Advantage.
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 The Bankruptcy Act?
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 materially contributes in bankruptcy
- incurring debts during bankruptcy exceeding a prescribed amount (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.
How long will my bankruptcy last?
Bankruptcy lasts for three years unless your trustee lodges an objection to you being discharged and then the bankruptcy can be extended for an additional five years.
Bankruptcy is a last resort and has serious consequences.
Fox Symes is the largest provider of debt solutions to individuals and businesses in Australia. Fox Symes helps over 100,000 Australians each year resolve their debt and take financial control.
If you would like to find out more about bankruptcy contact us on 1300 361 204 or fill out the short contact form.