How long am I bankrupt?
Bankruptcies typically last 3 years and 1 day from the date you lodge your Bankruptcy Form. However, if you do not fulfil your obligations or assist the Trustee with handling your bankruptcy, the time can be extended to 5 or 8 years, depending on what obligations were not met.
Who handles my bankruptcy?
The law requires a Registered Bankruptcy Trustee, or the government Trustee, to manage your bankruptcy. Registered Trustees are government licensed practitioners who have formal qualifications in accounting or commercial law and extensive knowledge and experience in bankruptcy. They must be registered with the Australian Financial Security Authority (AFSA). Brenda Mudie is a Registered Bankruptcy Trustee with over 16 years in insolvency and forensic accounting.
When you apply for bankruptcy, you can choose a Registered Trustee. If you don’t choose a Trustee, the government Trustee (known as the Official Trustee) is appointed. In some cases the Official Trustee transfers bankruptcies to Registered Trustees.
Who pays the Trustee?
Trustees are paid for the work performed handling your bankruptcy. The fees paid are generally approved by your creditors and can be calculated using one, or a combination of, the following methods:
- on a time basis at an hourly rate;
- a quoted or fixed amount based on an estimate of the costs
- a percentage of the assets and funds realised with the rate set under the Bankruptcy Act
If creditors don’t approve the fees, the Trustee can claim $5,272 in fees for each bankruptcy without creditor approval. This amount is updated each financial year .
The Trustee’s fees are drawn from the amount received from the sale of assets in your bankruptcy. If there are not enough assets to pay the Trustee’s fees, the Trustee remains unpaid.
What happens during my bankruptcy?
Your Trustee will work with you and your creditors to achieve an outcome that is fair and reasonable for both.
You have a legal obligation to provide all information that your Trustee requests, including bank statements and other records. You also have a legal obligation to keep your Trustee updated with changes to your circumstances including changes to your income, job, address, phone number and other contact details.
Your Trustee may ask you for more information and documents about your financial matters. Also, the Trustee will ask for information about your income and assets during each year of your bankruptcy. You have a legal obligation to provide all this information to the Trustee.
How long is bankruptcy recorded on my credit rating?
A record of your bankruptcy is kept by credit reporting agencies for:
- 5 years from the date you became bankrupt or
- 2 years from when your bankruptcy ends, whichever is later.
Who will know I am bankrupt?
The National Personal Insolvency Index (NPII) is a public register of insolvency proceedings in Australia, including bankruptcy. Your name will appear permanently on the NPII register. Some other information that may appear on the NPII are:
- Name, date of birth, residential address, and occupation that you disclose on your bankruptcy form
- Any previous names and aliases
- The type of administration (e.g. bankruptcy or debt agreement), the start date and the administration number
- The name and contact details of the trustee or administrator
- The current status of the administration e.g. whether you’re discharged from bankruptcy
In limited circumstances, if your safety is at risk, you can request to hide your address in the NPII.