Bankruptcy Advice

Deciding to declare bankruptcy is a huge step to take.  There are many considerations to make and the dire consequences of this action should be borne in mind.  Many people are confused about the facts regarding bankruptcy. 

To be eligible to file for bankruptcy does not require a minimum amount of debt.  To be declared bankrupt, you can choose to do so voluntarily or a creditor can petition to have you declared bankrupt.  Your first step in the process is to complete a Debtor's Petition and Statement of Affairs.  The information on the form must include all your debt and assets.  Failure to include all the information might lead to penalties being imposed.

A trustee will be appointed to handle your case.  The trustee will do a thorough review and analysis of your financial situation to confirm your list of assets and liabilities.  The trustee will sell your assets other than specific ones that you may be allowed to keep. 

If you earn over a certain amount, the trustee will mandate contributions from your income.  If during investigation of your financial affairs the trustee finds that you have transferred property or money to another person for inadequate consideration, they will attempt to recover it.  You can appoint the trustee when you lodge the petition.  If you do not, one will be appointed on your behalf.  Your creditors have the choice to request a change of trustee if they so wish.

There are certain actions that you will be responsible for during your period of bankruptcy.  You should advise your trustee of any changes of name or change of address.  You will be required to obtain permission to travel overseas and certain conditions may be imposed.  You might have to surrender your passport.

If you experience a change in income, particularly if your income is close to the specified limits, your trustee has to be notified.  You have to notify your trustee if you inherit or win any assets during this period.  Failure to abide by these rules may cause extension of your bankruptcy period.

You will not be allowed to be a director of a company without permission from the Court.  You will be prohibited from being employed in certain professions or trades.  If you wish to borrow money or obtain credit over a set amount, you have to advise the person or institution that you are dealing with that you are a bankrupt.