Bankruptcy - How To Succeed 3

Geographical Interpretations Australia In Australia, all forms of bankruptcy are governed by legislation that is entitled The Bankruptcy Act 1966 (Commonwealth). According to this, the act of becoming bankrupt is only available to individuals. In the case of companies classified as insolvent, they are required to go into administration, which is alternatively known as liquidation. This legislation has three provisions which cover almost all the applications for bankruptcy. They are:rnParts 9 and 10, which relate to Debt Agreements and Personal Insolvency Agreements respectively. Both these Parts refer solely to arrangements between debtors and creditors.rnPart 4, which relates to Full Bankruptcy. It is, in fact, only this Part that relates solely to an application for actual bankruptcy. An individual can apply to have themselves declared bankrupt by approaching the Official Receiver and submitting what is described as a debtor's petition. Such a course of action is administered by the Insolvency and Trustee Service of Australia, or ITSA. There is an alternative way in which an individual can be made bankrupt, viz. a sequestration order is made in the Federal Magistrates Court following a creditor's petition. An essential criterion for the lodging of a creditor’s petition or for an individual’s bankruptcy application is that the debt itself must have a minimum value of $2,000. It is essential that a document entitled a Statement of Affairs is lodged with the ITSA by those deemed as bankrupt. Such a document gives details relating to all of their assets and liabilities. Until the ITSA has received this Statement, a bankruptcy cannot be set aside. Once the filing of the Statement of Affairs has been made with the ITSA, a bankruptcy relating to Part IV categorisation has a lifespan of three years. Once the Statement has been filed, the three year timescale in respect of a debtor's petition would begin without delay. In the case of a creditor’s petition, the sequestration order to the Federal Magistrates Court is normally made first. Once this has been done then, and only then, can the Statement of Affairs be duly filed. Further, should the Statement be lodged outside a certain period of time, the bankrupt may be liable for prosecution and/or a fine. rnThe bankrupt’s estate is administered, in respect of all matters, by an appointed Bankruptcy Trustee, such as an Official Receiver. The role of the Trustee includes:rnEnsuring that each of the creditors are informed about all relevant aspects of the estate, and handling any enquiriesrnMaking sure that the bankrupt complies with all the pertinent requirements of the Bankruptcy ActrnMaintaining full control of all aspects of the bankrupt's financial affairsrnEnsuring that, under the Banking Act, whatever funds the estate is entitled to are duly realised, together with the distribution of any dividends to the creditors that may ensue It is an essential requirement of all bankrupts that, during the period in which they are classified as bankrupt, they are subject to certain restrictions as laid down in the Act. Examples of such restrictions include:rnThe bankrupt must receive the appropriate permissions from the Trustee in order to be able to travel overseasrnThe bankrupt must make available to the Trustee full details of all income received, from whatever sources, and realisable assets. Accordingly, should the income details turn out to be incomplete, then the Trustee is entitled to lodge an Objection to Discharge. The result of this is that the bankruptcy status is extended for a further five years. Bankruptcy – How To Succeed