Understand the Consequences and Restrictions of Bankruptcy
By Administrator 02 June, 2013
Bankruptcy has some harsh consequences which will remain for many years after you have been discharged. Whilst you are bankrupt it may also place restrictions on your lifestyle and employment opportunities. Bankruptcy should not be considered lightly and any decision to file for bankruptcy should be carefully thought through. Please read this article very closely and also consider the alternatives to bankruptcy as they may be less intrusive to your lifestyle.
If you have any questions please call our friendly personal debt advisors on 1800 676 598. Our initial discussion is free of charge.
How long will it last?
Will there be a public record of my bankruptcy?
Yes, your bankruptcy will be recorded for life on the National Personal Insolvency Index which is a database maintained by the federal government agency known as AFSA
Will my credit file be tarnished by bankruptcy?
Yes, your bankruptcy will be recorded on commercial credit reporting databases for 7 years (starting from the date of your bankruptcy).
Below is a snapshot of the restrictions which you may experience whilst bankrupt:
Surrender your Passport
Your Trustee in Bankruptcy will ask you to surrender your passport. If you wish to travel overseas for work or pleasure you will need to firstly seek the permission from your trustee. If you fail to return to Australia (when requested to do so by your Trustee), your bankruptcy will be extended to 8 years.
Yearly assessment of your income
Your Trustee in Bankruptcy will need to undertake an assessment of your income every year of your bankruptcy. The purpose of this is to make an assessment as to whether you are liable to pay compulsory income contributions into your bankrupt estate.
Restriction on credit limit
Whilst you are bankrupt you can’t apply for credit more than $5,259 without disclosing to the credit provider that you are bankrupt. Failing to do so can also lead to prosecution.
Restriction on occupations
Bankruptcy may restrict your employment opportunities. Some professions do not allow bankrupts to practice freely without restrictions placed on them. AFSA has published a list of professions or trades which may be affected by bankruptcy. If you hold professional qualifications or a trade licence you should carefully review this and contact your professional body or licencing body before you file for bankruptcy.