What steps do I need to take to file for bankruptcy?
If you have determined that you cannot resolve your debts by coming to an agreement with your debtors, and you have decided that bankruptcy is the best option for you, then you will need to file the necessary paperwork.
You must have over $2000 in debt and you must be a resident or have a home or a business in Australia.
You will need to contact a registered trustee to assist you with the bankruptcy. Then you will need to file A Debtors Petition, A Statement of Affairs, and an Acknowledgement that you have submitted all the necessary information. Depending on your personal situation, you may need to pay a fee to begin the bankruptcy process.
Bankruptcy usually takes three years. However if you are unco-operative with the trustee, it can take as long as eight years. Some debts may not be included in the bankruptcy, such as child support, maintenance, or debts as the result of fraud, which you will still be responsible for their payment. You will be allowed to keep a limited amount of your belongings, but most of the non-exempt items such as your home, land, and any investments will be placed under the control of the trustee and sold to settle your debts. Any non-exempt property you may receive during the term of the bankruptcy will also be under control of the trustee. Your permission is not needed to sell your property.
Bankruptcy is a very serious matter and you must be certain that this is the only remedy to your dilemma because the consequences are severe. You will not be able to leave Australia without written permission of the trustee, and you may be required to give up your passport. You also have to keep the trustee notified of any address changes. Your work may also be affected, as you may not be able to handle money and you will not be able to have a license for such things as real estate license, liquor license, construction license, or a license as a tax agent. You cannot be a director of a company and there are some public positions you cannot hold without permission of your trustee.
The bankruptcy will remain on your credit file for seven years, accessible to potential lenders and employers. It would be wise to be aware of any options and make an educated decision. This is because you will be held within the confines of your bankruptcy for quite some time. It not only affects your credit, but also your ability to live your life the way you want to.
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