When a person is declared bankrupt a Trustee in Bankruptcy is appointed to manage their affairs. Subject to some exceptions, all assets which a person previously held will, upon being declared bankrupt, automatically vest in the bankrupt’s Trustee in Bankruptcy.
Typically, a bankrupt will be able to retain, amongst other things, most ordinary household items, tools used to earn an income up to a prescribed amount, vehicles provided that the value does not exceed a prescribed amount, compensation payments for a personal injury and any assets held in trust for another person.
Bankruptcy typically lasts for three (3) years. It can, however, depending on the bankrupt’s personal circumstances be annulled earlier or even be extended.
Please note that not all debts will be discharged by virtue of being declared bankrupt. A prime example of this is the obligation to pay child support.
As a bankrupt you are required to comply with all lawful and reasonable requests made by your Trustee in Bankruptcy. Typically, this pertains to supplying various information and materials regarding your financial affairs. It does, however, also include an obligation to surrender your passport and to obtain the permission of your Trustee in Bankruptcy should you wish to travel overseas.
You can continue to derive an income after being declared bankrupt. Please note, however, that:
You can earn up to a prescribed amount before a portion of your income is applied towards payment of your debts;
If you are an undischarged bankrupt you:
- are automatically disqualified from being a director of a company; and
- may be prohibited from practicing in your chosen profession depending on that professions’ particular requirements.
Our office often assists in bankruptcy matters. It is important that if you receive any correspondence regarding bankruptcy that you treat that correspondence seriously and urgently obtain legal advice. Quite often matters can be resolved before bankruptcy occurs if one acts prudently.
Once a person has been declared bankrupt it can be an extremely difficult situation to resolve particularly because most of the bankrupt’s assets vest in the Trustee in Bankruptcy and the Trustee in Bankruptcy is required to be paid for the services which he or she renders.
Our office has also assisted Trustees in Bankruptcy to try and recover monies owed to a bankrupt.
To find out more or if you need advice or assistance please speak to one of our friendly team at Hale Legal.