Insolvency FAQ

What is the difference between bankruptcy and liquidation?

Bankruptcy regards a person going through insolvency whereas liquidation is when a company goes through insolvency processes.

Why would someone voluntarily petition for their own bankruptcy?

If you are struggling under the pressure of various loans and commitments, bankruptcy may be an option to consider as you will no longer be chased by creditors for debts.

You need to seriously weigh up whether bankruptcy is right for you, because despite giving relief from creditor harassment, it also imposes some serious restrictions on you.

I am unsure if I want to go bankrupt.  What can I do?

You can declare an intention to present a debtor’s petition.  This gives you a 21 day stay on enforcement action from creditors and therefore affords some breathing room.  This allows you some time to think about whether to apply for bankruptcy or come to some other solution.  However, be aware that if you put in a declaration of intention to present a debtor’s petition, this is an act of bankruptcy that creditors may use as an act of bankruptcy in submitting a creditors petition against you.

If you are in this situation, call 1300 30 66 49 and have a free no obligation chat with one of our team members at Professional Insolvency Services.

Should I file for insolvency / bankruptcy?

Give us a call on 1300 30 66 49 and through looking at a holistic picture of your situation we can determine whether bankruptcy is in your bests interests.

If I go into bankruptcy how long will it last?

Bankruptcy is discharged after 3 years once the Statement of Affairs has been filed.  However if the trustee makes an objection to your discharge, your bankruptcy may be extended from five to eight years.

How long will it take to file bankruptcy?

Our experts make this process quick and stress free for you.  We generally take 2-3 working days to file bankruptcy on your behalf.  Contact Professional Insolvency Services now on 1300 30 66 49 to start this process.

How will becoming bankrupt affect my partner?

You do not need to file bankruptcy with your partner.  Depending on your circumstances, your partner may not even be affected by you declaring bankruptcy.

Will bankruptcy wipe out all my debts?

Bankruptcy will discharge your provable debts which may include debts such as; credit cards, GST, tax and unsecured personal loans.  Due to this, you are able to get a fresh start and relax without debtors constantly hounding you.  However if you have a; HECS (Higher Education Contribution Scheme) debt, court imposed fine or a Centrelink debt, bankruptcy will not wipe these things.  If you are unsure, call our experts at 1300 30 66 49 and we will provide you with further information.

Are there any limits to how much I can be made bankrupt for?

For a creditor to petition for your bankruptcy, you must at least have a debt of $5,000.  A few years ago this amount was set at $2,000 however there were concerns about people being bankrupted for small debts.

If I go bankrupt am I allowed to travel overseas?

Yes, however you will need to apply to the trustee for permission to go.  This is to ensure that people in bankruptcy don’t leave the jurisdiction permanently.  Under most circumstances you will successfully get permission to go overseas.  Occasionally a trustee may ask for your passport, but you are able to request to get it back should you wish to travel.

If I go bankrupt will I lose my house?

The family home is not deemed to be a protected asset pursuant to the Bankruptcy Act and therefore it vests in the trustee during bankruptcy.  The trustee will need to assess various factors including the amount of equity you have in the property, whether you own the property jointly and whether your property has a mortgage on it that regular repayments are being made on.  We note that where there is equity in your home after a mortgage has been paid out and the costs of selling the property have been taken out, a trustee may be obliged to sell the property and distribute the proceeds to the creditors.

At Professional Insolvency Services, we understand that people are attached to their homes and we will do all that is possible to assist you to save this important asset.  Call us as soon as possible on 1300 30 66 49 to give yourself the best chance to save your home.

Will my car get taken away if I go into bankruptcy?

You will be allowed to keep a personal vehicle for transport that costs up to $7,350.00.  Where you do not fully own the car, this will be determined on this basis of how much equity is in it.  For example, if your car is worth $25 000 and you are currently paying it off, if you had only paid off $5000 of the car you would be able to keep it as the equity in the car is merely $5000 and less than $7,350.00.  The company renting you the car is also likely to be happy to let you keep your car, so long as payments continue to be made.

Will bankruptcy affect my job?

Generally, becoming bankrupt does not prevent you from working and you are actually encouraged to work.  There are only restrictions on work in certain professions, including if you are a registered trustee or a parliamentarian.  You will not need to tell your employer that you are bankrupt unless it is a condition of your employment.

Do I have to make payments to the trustee from my income?

Depending on your income, you may need to make payments to the trustee during bankruptcy for the benefit of creditors.  This is the case where you earn more than the current base income amount. If you have dependents who rely on you this is taken into account in calculating the base income threshold amount and assessing how much you must contribute.

For comprehensive advice on what you may be liable to contribute from your income in bankruptcy, contact Professional Insolvency Services on 1300 30 66 49.

Will everyone know that I am bankrupt?

It is likely that no one aside from the trustee will know you are bankrupt.  Generally it is only when people are famous that the newspaper will run an article about bankruptcy.  Whilst in the past there was a certain stigma attached to bankruptcy, we have found that this is no longer the case.  Many of our clients have discovered that bankruptcy is not the end of the world and has been an opportunity to turn their finances around.

However, you must remember that if you go bankrupt the National Personal Insolvency Index (the NPII) will have a permanent record of your bankruptcy.  People are able to access the NPII and potentially look your details up.

Am I able to challenge the trustee’s decisions?

This may be possible depending on your circumstances.  An application to the court may be made by a bankrupt, a creditor or anyone else affected by the trustee’s decision.  The court has wide review powers to challenge an act, omission or decision of a trustee and may make orders that are equitable in the circumstances.  If you think this may apply to you, give us a call on 1300 30 66 49.

Will my superannuation be affected in bankruptcy?

No, in line with the humanitarian approach to have a fresh start through bankruptcy, you are able to retain your superannuation.  This is due to the fact that from the State’s perspective you are less likely to need an aged pension and be a burden to the State.  However, it is important that you do not place extra money into super prior to becoming bankrupt (in an attempt to protect more of your money) as this would be able to be clawed back by the trustee and would constitute a voidable transaction.

Will bankruptcy affect my credit report?

Put simply, yes.  The fact that you went bankrupt will be kept on your credit report for 5 years or longer.

I forgot to include a debt when I filed for bankruptcy. What should I do?

Bring this to the attention of the trustee.  The forgotten debt is able to be added after the bankruptcy is processed.

I am owed money by someone who just went into bankruptcy, how will this affect me?

This depends whether you are a secured or unsecured creditor.  If you are a secured creditor you may realise the secured property and do not need to prove in the bankruptcy.  If you are an unsecured creditor, you have the right to prove the debt in bankruptcy.  Remember that once the debtor is deemed bankrupt, there will be no other recourse available against them.

Why did the liquidator get paid when I didn’t?

Liquidators have priority when funds from the bankrupt’s assets are distributed.

How do I know you are the best provider of bankruptcy and insolvency advice in Brisbane?

Our wealth of experience, hundreds of success stories and reputation in providing quality services speak for themselves.  You can feel safe in the knowledge that Professional Insolvency Services is looking after your rights and taking care of your obligations.

How can I find out whether a company has gone into liquidation?

Call us now on 1300 30 66 49 and we can undertake a Company Search and determine this for you.

If I have received a demand or wind up notice, is it still possible for me to go bankrupt?

Yes, however we suggest you contact one of our experts on 1300 30 66 49 because this sounds like a complex situation and a mistake on your part may have serious ramifications.