Bankruptcy
This chapter explains bankruptcy, outlines some of the major components of bankruptcy and considers the advantages and disadvantages of bankruptcy. There is also information on alternatives to bankruptcy, how a person or company becomes “un”bankrupt, what creditors are and the role they play and what happens to persons property when they are bankrupt as well as bankruptcy offences.
What is Bankruptcy?
Bankruptcy is a legal status conferred under the Bankruptcy Act 1966 (Cth). The Act applies Australia wide. A person declared bankrupt is able to have most of their property (exceptions include household furniture, personal injuries compensation and certain vehicles) made available for distributi...
Who can be made bankrupt? Who should consider bankruptcy?
Who Can Be Made Bankrupt? Only natural persons can be made bankrupt. Where there is a partnership or persons trading under a business name, it is not the firm which is made bankrupt, but the individual or individuals who make up that firm. Companies cannot become bankrupt under the Act (section ...
Some Basics of Bankruptcy
Proceedings A person can become bankrupt under the Bankruptcy Act 1966 (Cth) in the three following ways: voluntary bankruptcy (approximately 80% of bankruptcies): the debtor files a bankruptcy form either online (https://www.afsa.gov.au/online-services-help/online-services-support/com...
Advantages and Disadvantages of Bankruptcy
Bankruptcy should only ever be considered as a last resort. While every debtor’s particular circumstances will vary there are advantages and disadvantages that should be weighed when making a decision about whether or not to proceed with bankruptcy. For insolvent non-business debtors with little ...
The Bankrupt’s Property
There is some property which is protected when a person declares bankruptcy. Section 116 of the Bankruptcy Act 1966 (Cth) sets out which property creditors can take to pay debts owed by a person declaring bankruptcy. The property which the Section lists as being exempt is: Any property...
Offences
The Bankruptcy Act 1966 (Cth) creates criminal offences that are capable of arising both before and during bankruptcy. Prosecutions may result in prison sentences or hefty fines. The range of offences capable of arising under the Bankruptcy Act 1966 (Cth) generally result from acts of fraud or...
Ending a Bankruptcy
Bankrupts will normally be eligible for automatic discharge from bankruptcy three years after filing their statement of affairs. If however, objections have been lodged with the Registrar or the Inspector General in Bankruptcy, the bankrupt may not be discharged for five or eight years dependi...
Page last updated 19/03/2018