Are you experiencing financial difficulty? Maybe you’re contemplating bankruptcy, and need some advice – we may be able to help.
Bankruptcy is a legal process that catches most of your debts and liabilities. It provides individuals relief from relentless creditors and offers somewhat of a “fresh start”.
Debtor’s Petition v’s Creditor’s Petition
Under the current legislation, an individual may voluntarily enter into bankruptcy (also known as a debtor’s petition for bankruptcy), or one of his or her creditors may apply to the Court (referred to as a creditor’s petition). Voluntary bankruptcy is the most common method of initiating bankruptcy, as a prospective bankrupt is able to maintain some control over the process. For example, an individual contemplating bankruptcy will have some control over when bankruptcy is entered into and a choice of trustee.
Considerations and Consequences
Although negative attitudes towards bankruptcy have changed in recent years, it is still a serious act. If you’re contemplating bankruptcy, there are a number of considerations and consequences, which highlight the importance of obtaining legal advice. Such factors include:
- Effect on credit history
- Seizure of assets
- Effect on estate planning
- Travel restrictions
- Income contributions
Proposed Amendments to the Bankruptcy Act 1966
Interestingly, there are proposed amendments to the Bankruptcy Act 1966 to reduce the term of bankruptcy from three years to one year. If adopted as drafted, the changes will apply to existing bankruptcies. Therefore, if a bankrupt has served more than one year of his or her bankruptcy, they will be discharged immediately on the legislation coming into effect. If the bankrupt has not yet served one year, the terms of their bankruptcy will be reduced to one year. The Senate Committee is due to report on the proposed amendments in the near future.
Bankruptcy is a serious act and should not be entered into lightly. There are also less severe options available in some circumstances. To ensure you have all of the information available, please do not hesitate to contact our office on (07) 4963 2000 or via our online contact form.