An insolvent individual who has a connection to Australia can voluntarily declare for bankruptcy by completing the following forms:
Statement of Affairs
The period of a bankruptcy is 3 years however a Trustee can extend the term to 5 or 8 years from the date of filing of the Statement of Affairs should the bankrupt not be cooperative or breach certain conditions.
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An individual must provide complete and correct details of their assets, liabilities, income, financial affairs and associated entities in the Statement of Affairs.
The Bankruptcy Act 1966 provides a mechanism for the protection of individuals and their creditors.
The divisible assets of a bankrupt vest in the Trustee in Bankruptcy for sale and the bankrupt does not have authority to deal with those assets. There are a number of exemptions that individuals are able to retain as bankrupts – some examples follow:
Motor vehicles with a value exceeding $7,700
Tools with a value exceeding $3,750
Funds in a regulated superannuation fund
Assets held as Trustee
Necessary household items
Life insurance or endowment policies
Certain damages and compensation payments
A bankrupt is subject to annual income assessments to determine if they are liable to pay compulsory income contributions into their bankrupt estate. A person with no dependants may earn an after-tax income of $54,736.50 before being liable to pay any income contributions.
A bankrupt must disclose their bankrupt or debtor status when seeking to obtain goods or services on credit, by hire purchase or cheque; when leasing, hiring or promising to pay for goods and services; or when seeking to obtain an amount by promising to supply goods or render services for amounts exceeding $5,546.
A Trustee in Bankruptcy will undertake investigations into the affairs of the bankrupt which include inquiries into any:
Transfers to defeat creditors
A bankruptcy does not release an individual from the following:
Child support payments
Various student loans (HECS / HELP)
Files or penalties of the Court
Liabilities arising from fraud
Contact our experts at Artemis Insolvency for any queries you may have regarding the implications and consequences of a bankruptcy and completion of your Statement of Affairs. We are also available to administer your bankrupt estate should you wish to file for bankruptcy.