Bankruptcy: What Happens?
When you are declared bankrupt, your house may be sold and most of your other assets will become the property of your trustee. These include your bank account (if it has credit funds), business, shares, any tools of trade above $3,700 and any other assets, except personal items and most household goods. The trustee will try and convert all assets into cash and after deducting fees, will distribute such funds (if any) to creditors.
You will no longer be allowed to be a company director, nor stand for public office or continue in public office. You may work for a wage or salary, but might have to make regular repayments to the trustee. Bankruptcy lasts for three years unless extended by the court. After discharge your name will appear on the National Personal Insolvency Index
forever and on credit reporting agencies’ records for two years from the date of discharge, or up to five years from the date you became bankrupt, whichever is later.
If there is property vested in the trustee and it has not yet been dealt with, you don’t automatically get it back. The administration of your bankruptcy may continue after discharge. According to the Bankruptcy Act says a discharged bankrupt must still assist the trustee to finalise administration of the bankruptcy, advise the trustee of any change of address, provide information about financial circumstances and pay outstanding income contributions. You also have to give up secured assets if required by the relevant secured creditors and pay debts that are not released by bankruptcy, such as penalties and fines.
For further information contact Matthews Williams Solicitors and Conveyancers.