How will I be treated as a bankrupt?
Bankruptcy is serious business. It isn't just serious in the sense that it severely compromises your credit report, but in the fact that it severely compromises your life. Being a bankrupt puts severe restraints on your very being.
For example, you have a trustee that is assigned to you when you file bankruptcy. This trustee literally oversees everything that you do in your financial life. For example, you are limited on the amount of assets that you can have after becoming a bankrupt. If your assets exceed what you have been allowed, then those assets may be taken away. This occurs at the time your bankruptcy is discharged and anytime during the next seven years.
Being a bankrupt also affects what kind of job you have. If the job requires handling money, you will not be allowed to carry out that job. If your current job involves dealing with money, then you may lose your job or be moved to another position. Even if a job has nothing to do with handling money, an employer may take a look at your credit file and choose not to employ you for the fact that you have a bankruptcy on your credit file.
Another aspect that is affected is that you cannot hold a high position within a company. This means that you cannot be a CEO or anything of that sort. This is because this is a job that requires a lot of responsibility. Bankruptcy is viewed as a consequence of being irresponsible. Even if you could not help the circumstances that led to your bankruptcy, all that anyone sees is what is on paper. This means that you can not apply for a real estate license, a building license, or a tax agent's license. Even owning a business can be tricky. If you are doing business under another name, then you have to tell your trustee of this as well. Again, you cannot have assets that exceed the amount that you have been allowed. Anything that will help you gain further assets has to be controlled.
Even if you want to take a vacation, you have to consult with your trustee. You may not be allowed to leave Australia. As a matter of fact, your passport may be revoked so that you can't leave. The reason is because, if you have the money to take a vacation, then you should have had the money to satisfy your debt.
Basically, anyone wanting to file bankruptcy to acquire freedom from their debts has to sacrifice their freedom in other areas. No one will be able to have the money to do those extra things during the seven years in which their bankruptcy is on their credit file. If that extra money shows up, then it must be confiscated.
This may seem synonymous with becoming a prisoner of the system because it sort of is. You are giving up more than a good credit rating when filing bankruptcy. You more or less have to work with everything you have left and hope that your income source is not affected by your bankruptcy so that you can continue making a living.
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