Filing For Bankruptcy

When considering filing for bankruptcy your first step is to determine whether bankruptcy is really the right option option for you.

We strongly suggest that you contact a specialist bankruptcy advisor or a reputable financial counsellor. They can explain your options and the procedures involved if you do decide to start filing for bankruptcy.

You can file yourself bankrupt for any amount but a creditor can only commence action to have you declared bankrupt for a debt over $2000. If you wish to bankrupt yourself you may file a debtors petition in either the Federal Court or Federal Magistrates Court.

After you file for bankruptcy, once a trustee has been appointed they will effectively take control of your income and assets.

You are free to appoint a private registered trustee however you must understand that any fees they charge will need to be paid out of your assets whereas the Official Trustee will act free of charge.

You can also seek the assistance of a other professionals including

1. Registered Trustees who are a bankruptcy and personal insolvency specialists

2. Debt agreement administrators

3. Insolvency and Trustee Service Australia (ITSA).

ITSA is a Commonwealth government agency and can provide you with information on your rights, obligations and options but they are not allowed to give you specific advice on how to solve your debt problem including filing for bankruptcy.

Bankruptcy lasts for a period of three years once the paperwork is complete and finalised unless there is an objection logged by the trustee which can extend your bankruptcy up to 5 or even 8 years.

A bankruptcy professional can discuss with you the actions and omissions that result in objections.  Generally objections are for misleading the trustee, failing to follow the correct procedures, meetings and execution of documents plus failing to disclose your assets, debts and creditors.

It is important to understand that after filing for bankruptcy not all money you owe is eradicated. Any fines and money you owe to social security is still fully payable as is any child maintenance.

Debts owed to secured creditors such as mortgagees and hire purchase companies are not automatically cleared and they have the right to sell that asset that they hold security on.

Any money in excess of what is owed to the secured creditor is then available to pay for your unsecured creditors however if there is a shortfall then they are able to make a claim for any loss.