Personal Insolvency

What do I do if I have been served with a Bankruptcy Notice?

If you have been served with Bankruptcy Notice, it is critical that you seek legal advice as soon as possible so that all option s available to you in your individual circumstances may be considered.

Can I make myself voluntarily bankrupt?

If you consider that are personally insolvent, there may options such as debt arrangements and negotiation but if these are not possible, bankruptcy may be your only option. You may not want someone else to send you bankrupt either and you can elect to go bankrupt voluntarily. This can be by either filing a Debtor’s Petition and a Statement of Affairs with AFSA or appointing a private bankruptcy trustee. We strongly recommend that you seek legal advice if you are considering going down this path.

What will happen if I go bankrupt?

Whether you choose to go bankrupt voluntarily or are made bankrupt by order of the court, it makes no effective difference to what happens after, other than your bankruptcy trustee will be appointed by the court and usually at the recommendation of the creditor.
Bankruptcy generally lasts for three years, although that can be extended in particular circumstances. A bankrupt person has certain restrictions, including:

• You may have to answer detailed questions with the trustee on an ongoing basis if the trustee chooses to investigate your estate
• You will not be able to be a director of a company for the duration of your bankruptcy
• You will have strong credit restrictions including an obligation to disclose such to a potential creditor during your bankruptcy
• you can operate a business but only under your personal name ie., not under a business name, unless you make full disclosure of such
• you may have to surrender your passport and otherwise have to seek permission from your trustee during your bankruptcy in order to travel overseas.

Can I still earn an income while I am bankrupt?

Absolutely. There is no restriction on how much you earn. However, there is a threshold amount that you will able to earn and retain. This amount will be determined by your trustee according to a complex formula and takes into account any dependants you have, for example. Half of any amount over the threshold amount will be retained by you and the other half will need to be paid to the trustee for distribution to creditors. This will apply for the duration of your bankruptcy.

Trusted advice at a time when you need it most

If you’re considering entering into an insolvency agreement, make an appointment us. We can provide you with sound and appropriate legal advice.

We can assist you if you:

• have received a letter of demand or are being pursued by a debt collector
• are considering bankruptcy
• have been served with a Bankruptcy Notice or Creditor’s Petition
• require assistance with negotiating with creditors
• need representation in bankruptcy proceedings brought against you
• have received correspondence from your bankruptcy trustee and seek advice or representation
• are considering annulling your bankruptcy.

Don’t wait until it is too late. Should you require representation or just solid professional advice with respect to any bankruptcy or personal insolvency please contact us.