1. Voluntary insolvency
In Australia, you may declare bankruptcy voluntarily, or your creditors may petition for your bankruptcy. In Australia, filing for bankruptcy does not require a minimum quantity of debt. First, a Debtor's Petition and Statement of Affairs must be completed. The Insolvency and Trustee Service Australia (ITSA) receives these forms. This organization handles all bankruptcies in Australia. On this form, you must disclose every detail of your personal bankruptcy, including all private and business debt. If you do not comply, you could face up to and including imprisonment.
What happens to my debts if I file for bankruptcy?
Once you are declared insolvent, you are no longer required to pay the debts listed on your bankruptcy petition that can be proven. This means you are exempt from repaying unsecured debt, such as credit card and personal loan balances. However, if you owe secured debt, such as a mortgage, the creditor may force you to sell the collateral and pay them the proceeds. Numerous debts are not discharged by bankruptcy, including:
• Fines • Fraud-related debts • Maintenance payments • Child support • Debts owed to the Department of Social Security • Debts owed to the Higher Education Contribution Scheme prior to filing for insolvency • Student Supplement Loans
Who manages my bankruptcy filing?
A Private Trustee or the ITSA will be appointed to supervise your bankruptcy. ITSA or the Private Trustee will liquidate your divisible assets and require you to contribute a portion of your income on a recurring basis. Your financial history will be reviewed for any assets that were not disclosed in your bankruptcy petition.
What happens to my property?
When you file for bankruptcy, your divisible assets are all of your possessions with a market value. This typically includes automobiles, antiquities, land, stocks, and other assets. In order to file for bankruptcy in Australia, you must surrender control of the overwhelming majority of your assets.
5. What will become of my home?
If you have any interest in a residence, that interest reverts to the control of the Trustee. This may result in the sale of your home and the distribution of the proceeds among your creditors.
What happens to my vehicle?
The Trustee will determine if you can keep your car. As a general rule, you will be allowed to retain a car if it is your primary mode of transportation and does not exceed a certain value.
7. What will become of my job?
Filing for bankruptcy will not result in employment termination. Actually, your employer is not informed of your personal bankruptcy unless they are also one of your creditors.
How long will I continue to be bankrupt?
If you declare bankruptcy in Australia, you will remain bankrupt for three years from the date you lodged your Statement of Affairs. The Trustee of your bankruptcy case may extend this period to five or eight years if you fail to fulfill your obligations.
What are my responsibilities during bankruptcy?
After declaring bankruptcy in Australia, you are required to notify the Trustee of any name or address changes. In addition to requesting written permission to travel, you may be required to hand over your passport to the Trustee. If you fail to completely comply with the Trustee's requests, your bankruptcy could be extended by two to five years.
Can my insolvency be discharged within the first three years?
In accordance with the Bankruptcy Act of 1966, you may propose your creditors a composition or negotiate a debt settlement. The offered funds must have been exempt according to your personal bankruptcy records. The Trustee will convene your creditors at a meeting. If 75% or more of the value and a majority of the number of your creditors accept the offer, your bankruptcy will be dismissed.
The information in this article is accurate as of the date of publication, but should only be used as a guide. Always obtain professional counsel prior to taking action.""
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