When people find themselves in financially distressed circumstances and potentially facing bankruptcy there are often a number questions and actions to consider. Several of the most common are set out below. The FAQ’s are for people considering bankruptcy and are not intended as advice for insolvency practitioners.
NOTE: This document is not intended to provide legal advice. It is intended to provide a general overview on personal insolvency. Please contact Lavan’s Reconstruction, Recovery and Insolvency team if you need legal advice or assistance relating to a personal insolvency matter.
Bankruptcy is a debt solution for individuals to deal with unmanageable debts. Bankruptcy can help you clear your debts, limit creditor harassment and help you start over.
There are some exclusions to bankruptcy. Lavan can work with you to assess your eligibility for bankruptcy and to consider whether it is the best option for you.
Firstly in order to declare bankrupt you must meet the below requirements, as a minimum:
If you meet these two requirements Lavan will then work with you to assess your situation and recommend the next steps in applying for bankruptcy or one of the other options available (including personal insolvency or debt agreements or an informal restructure).
When you declare bankrupt all of your creditors are likely to receive notice from the trustee advising them of your situation and a public record search is available to everyone.
A personal insolvency agreement is a written agreement between you, your trustee and your creditors to pay an agreed amount of your debts without formal bankruptcy.
There are a number of financial, travel and company management implications of bankruptcy. The impact of these consequences will vary pending a person’s specific situation.
When you declare bankrupt some of your debts will be converted to rights to a pro rata payment of funds and others will stay in place for example those relating to secured debts like mortgages to banks.
Lavan’s Reconstruction, Recovery and Insolvency (RRI) team is well-established in the personal and corporate insolvency and restructuring space and provide expertise advice and support for their clients. If you would like to discuss your matter or if you require any additional information, please call Lavan partner Joseph Abberton on +61 8 9288 6765.