Earlier this year there were changes in the way you have to go about filing for bankruptcy. These changes are supposed to simplify how you can become bankrupt and how data regarding bankruptcy is captured.
So how do you go bankrupt? And what should you consider before you do?
Going bankrupt voluntarily
You can go bankrupt voluntarily. To do this you need to complete and submit a Bankruptcy Form. You can submit a Bankruptcy Form online via a website maintained by the Australian Financial Security Authority (AFSA) or you can get a Bankruptcy Form from AFSA or a private bankruptcy Trustee. If you complete a paper version of a Bankruptcy Form it must also be sent to AFSA.
AFSA will check the information in your Bankruptcy Form and if you have completed it properly you will become bankrupt.
You can choose to appoint the Official Trustee from AFSA as your bankruptcy Trustee, or you can choose to appoint a private bankruptcy Trustee.
You will be notified once you are bankrupt and AFSA will also notify people you owe money to that you are bankrupt. If you have appointed a private bankruptcy Trustee, they will also write to people you owe money to within 28 days of you becoming bankrupt.
How can a creditor make you bankrupt?
One of your creditors can make you bankrupt if you owe them $5,000 or more. Although, because of the impact of coronavirus, this amount has been increased to $20,000 but only for the period from March 2020 to September 2020. After that time, the amount you have to owe a creditor before they can make you bankrupt changes back to $5,000.
To make you bankrupt, a creditor generally has to have a judgment against you for $5,000 or more (or $20,000 from March 2020 to September 2020). The creditor then issues a document called a Bankruptcy Notice, which they have to serve on you, most commonly by personal service. If you don’t pay the amount owed to the creditor within 21 days of being served with the Bankruptcy Notice (or within six months if the notice was issued between March 2020 to September 2020) then the creditor can apply to Court to make you bankrupt. If that happens the Court will likely make an Order declaring you bankrupt and appointing a bankruptcy Trustee chosen by the creditor who is bankrupting you.
How we can help?
If you are facing bankruptcy then you should get professional advice on the options available.
We can assist you to become bankrupt and we can also act as your bankruptcy trustee. We are also able to discuss all options and risks with you prior to you going bankrupt. This can assist in identifying any situations which may give rise to issues or problems before you go bankrupt.
So, if you are considering bankruptcy, please get in touch with us on 1300 906 966 or send us an email at firstname.lastname@example.org to arrange a free confidential initial discussion.