We have collated the most frequently asked questions in one place to help you find quick answers to important matters.
Bankruptcy is the legal process of declaring that you are unable to pay your debts. Most debts are covered but bankruptcy does not release you from all debts.
It is important to understand the consequences of bankruptcy as it may affect your ability to get credit, prevent you from traveling, or hinder your ability with respect to some types of employment.
Outside of any administrative costs, there is no cost associated with applying for bankruptcy.
Most debts are covered including credit cards, unsecured personal loans, utility bills, and any unpaid rent. Bankruptcy does not cover court-imposed penalties, any child support payments, student loans, or any debts accrued after bankruptcy begins.
NO. You cannot go to jail for having unpaid debts. There is a process that people go through if they are unable to meet their financial obligations and legal action is a potential repercussion. This is rare as most people that owe the debt (debtors) seek expert advice on how to deal with unpaid debts.
In most cases, a creditor must begin proceedings to recover the debt within 6 years of wither obtaining a final payment or written admission from a debtor that they are unable to repay any outstanding debts.
There is a distinct difference between domestic and international travel for those who have declared bankruptcy. There are no restrictions on domestic travel meaning you can move freely around Australia and its territories. However, there are restrictions with respect to international travel. If you wish to travel or move overseas you must first seek approval. You must contact your trustee and go through the application process. Fees and charges will apply.
It is common for people to confuse liquidation with bankruptcy. Liquidation applies to companies while bankruptcy applies to individuals. Unless you have significant personal liabilities, there is no reason for you to go personally bankrupt during the process of liquidation.
Read more on bankruptcy and liquidation.
If you haven't found the answers you are looking for, do not hesitate to reach out to us to receive free professional advice. We deal with a wide range of cases, including liquidation, insolvency, voluntary administration, and personal bankruptcy. Send us a direct message and we will be in touch with you within 1 hour.
Want to learn more about Personal Bankruptcy? Read the Australian Debt Solvers Resource Centre which features in-depth articles written by industry professionals.
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