Either the Insolvency and Trustee Service of Australia or a registered trustee will administrator your estate.
A trustee collects any assets not protected by a bankruptcy into cash. Property protected by bankruptcy can include:
- most furniture and household goods
- personal belongings
- a limited amount of tools of the trade so you can continue your profession
- a car worth up to around $ 6000 (this amount changes each year so be sure to check).
You will make regular payments to the trustees if your net income is above $ 37,200.00 a year (this is reassessed each year so make sure you check) to pay your creditors. How much you pay depends on how many dependents you have and if you pay child support.
Trustees keep your creditors informed of your progress on a regular basis.
Living with Bankruptcy
Your life will be restricted in certain ways once your bankruptcy is formalized. When it comes to credit, you must tell the people you are dealing with you are an undischarged bankrupt if you want to borrow more than $ 4200.00. It is a legal offense if you fail to do so.
Normally an employer is not aware of your bankruptcy unless you owe them money. It may affect your employment in the restriction from certain types of jobs (eg security), and may prevent you from holding some commercial licenses (eg builder).
While you are an undischarged bankrupt, you must inform the trustee if you change your name or place of residence.
If you want to travel overseas, you need written permission from the Court or your trustee. The Court or your trustee may pose written conditions if they grant you permission to travel. If you fail to return to Australia when a trustee requests you to, it can result in an extension to the term of the bankruptcy. Failing to return on request is a criminal offense and you may end up in jail.
What Debts you can not Claim through Bankruptcy?
There are some debts not covered by bankruptcy, including:
- fines for breaking the law
- debts you have because of fraud
- spousal maintenance payments
- child support
- money owed as a HECS (Higher Education Contribution Scheme) debt
- money owed to HELP (Higher Education Loan Program)
- student supplement loans
- some debts owed to Centrelink.
What Happens to Unsecured Depts?
Unsecured debts do not depend on an asset to repossess if you fail to make payments. Credit cards, phone bills and personal loans are all unsecured loans. Creditors in these situations can not take back the items or services purchased, and can take no further action if you declare bankruptcy. Your creditors can apply for repayment through the bankruptcy settlement.