1.1 What is bankruptcy?
Bankruptcy is a legal process which declares that a person is unable to pay their debts. It can absolve them of most debts and allow the person to have a fresh start. It can be seen as an exchange of a person’s assets and financial control for legal protection from the person’s creditors.
There are two ways to enter bankruptcy. You can either:
(a) enter voluntary bankruptcy; or
(b) someone you owe money to (a creditor) can make you bankrupt through a court process.
1.2 Who manages my bankruptcy?
When you become bankrupt, a trustee is appointed to manage your bankruptcy. This can be either:
(a) the Official Trustee in Bankruptcy of the Australian Financial Security Authority (AFSA); or
(b) you can nominate a registered trustee of your choice.
The trustee’s fees are generally paid out of the funds recovered in the administration of the bankruptcy.
1.3 How long does bankruptcy last?
The period of bankruptcy usually lasts for three years and one day.
This period can be extended by the trustee for up to 5 or 8 years.
AFSA may assist in determining when your bankruptcy ends, as well as discussing with your Official Trustee.
1.4 How do I confirm if someone is bankrupt?
The Bankruptcy Register Search (BRS) is an online service that allows access to personal insolvency information. For the cost of $15, a search can be conducted on the register to find information about a person’s financial position.
Do I have to appear in Court if I am bankrupt?
You are not necessarily required to make court appearances for becoming bankrupt.
Depending on your circumstances, you may be required to attend an examination before a Court if you have failed to meet your obligations as a bankrupt.
1.5 Is my bankruptcy advertised?
Your bankruptcy is generally not advertised. However, A bankrupt is listed on the National Personal Insolvency Index permanently, which can be searched by members of the public.