It's David I was wondering if I was to go bankrupt what will…

Dear customer, my name is***** solicitor, thank you for using Just Answer, I will assist with your question today. Please allow me a few moments to review your post and I will respond accordingly. Kind regards
John Melis

Dear customer, in relation to your important question the will assist you with understanding as to what happens you file for personal bankruptcy.

Personal bankruptcy is not often talked about, because it is one of those topics that people do not want to associate themselves with when a particular individual has become bankrupt. People can be vicious, and sometimes bankruptcy is not the fault of the person and others do not see it that way.

So what are the impacts on a person when they are bankrupt?

Bankruptcy can be a lengthy process for an individual, and can continue well after the three year period on which a bankruptcy may be discharged against that person.

When a person is made bankrupt the impact on that individual can be long lasting with the loss of face from family, friends and the business community. There is a mark of failure branded on the individual or humiliating character if the person cannot arise above the stigma that is upon them because of the bankruptcy. It often occurs that society will shun a bankrupt as a criminal, when in fact some circumstances they are not.

However, the blame for losses will eventually lay upon the bankrupt. Someone has to take the ‘fall’ for the decisions that were made, whether right or wrong.

The bankrupt has a number of important rules to follow. The bankrupt must attend meetings of creditors as the trustee requires. The bankrupt will be questioned in detail, which may be demeaning for the bankrupt. The bankrupt has to answer questions, disclose property, financial dealings, which may include with other people, companies, partnerships and entities.

The trustee will investigate the conduct of the bankrupt, accounts, and all other examinable affairs. The bankrupt will be required to deliver records and information as needed by the trustee. The bankrupt has to allow the trustee reasonable access to their premises and records. If the bankrupt fails to comply with the administration requirements of the bankruptcy process, the trustee may seek assistance from the court that the bankrupt be examined by the court, and other orders placed on the bankrupt to comply with the orders of the trustee.

If the bankrupt fails or refuses to comply with an order from the court, the bankrupt may be arrested and jailed if insufficient reason is provided by the bankrupt for failing to comply with an order.

If the bankrupt changes their name or address they need to notify the trustee and failure of is an offence, and may result in an objection to the discharge of the bankrupt when that time occurs.

When a bankrupt is working and their income reaches a certain threshold, the trustee may require the bankrupt to make contributions from their income under the direction of the trustee. Where the bankrupt fails to comply with the trustee direction, an automatic discharge from bankruptcy may be stopped.

Where a bankrupt has other accounts with banks or other financial institutions in Australia, the bankrupt cannot remove funds from those accounts, and those financial institutions that hold those funds are not permitted to allow payments out of those accounts unless authorised by the trustee. Then where money of the bankrupt is insecure, a freezing order may be applied against the account by the trustee through obtaining an order of the court.

The bankrupt cannot travel outside Australia unless consent is provided by the trustee, and the bankrupt must surrender their passport to the trustee. If the bankrupt leaves Australia without consent, an offence will have been committed by the bankrupt.

When a bankrupt seeks credit of over $5,447.00 which is indexed per year, the bankrupt is required to disclose to that party they are an undischarged bankrupt. This disclosure may result in the bankrupt not being able to carrying on a business if they are required to obtain credit in some form.

A bankrupt is prohibited from managing a corporation or being part of its management. Then if a bankrupt works in certain professional trades, such as a lawyer, accountant, veterinarian, builder, real estate agent, they will suffer working restrictions. The number of professions that are affected by bankruptcy order is extensive.

If prior to bankruptcy the person was a trustee of a self-managed super fund, and that person is made bankrupt, they can no longer be a trustee of the self-manage super fund.

There are many significant impacts on a bankrupt, and if there are alternative options to avoid bankruptcy they should be considered. For as once you have been made bankrupt the effects will be long lasting.

The property you have which has a mortgage, be taken under the control of the administrator who manages your bankruptcy.

If you have any further questions, I would be pleased to answer those for you.

Kind regards
John Melis