What consequences are there when filing for bankruptcy in Australia?
Anyone who is contemplating bankruptcy should only proceed after careful consideration because the consequences of bankruptcy are quite serious. The bankruptcy process normally lasts for three years, but if you are difficult or unwilling to co-operate with the trustee in charge of your bankruptcy, it can be extended to eight years. And there are still some debts that you may still be obligated to pay, such as child support or any debts that are the result of any type of fraud.
The bankruptcy will be listed in your credit file for seven years, even if the bankruptcy ends up being discharged; which means that each time a potential lender or employer requests information, they will be make aware of the bankruptcy.
Your job could also be affected if you handle money or if you are a licensed agent, because you cannot have a special license, such as a liquor license, a real estate license, a tax agent's license, or building license. And you cannot hold a public position or be the director of a company without obtaining permission from your trustee. You will loose the right to continue or to start any legal actions. And you will have to advise your trustee if you are in trade or business under any name other than your own.
You will be allowed to keep only a limited amount of your belongings, and any assets that are non-exempt will be placed into the hands of the trustee and they can be sold at any time; that includes any non-exempt assets you receive during the term of bankruptcy. Those sales, which may include your home, land, and any shares or investments do not require your permission.
For the life of your bankruptcy, you will need the written permission of your trustee if you want to go overseas or leave Australia for any reason. You cannot even leave for a holiday without getting written permission and you may be asked to surrender your passport. The trustee has to be notified of any change of address.
It is very important to explore every possible option and be aware of how bankruptcy will affect your life before you make your decision. It may be a viable choice for you to do what you can to work on your credit, as opposed to filing bankruptcy. You can literally be held prisoner when you are bankrupt and, unless you're ready to deal with that for seven or more years, it may be a good idea to try to exhaust all other options first.
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