Understand the Restrictions of Bankruptcy
Step 5 – Understand the Restrictions of Becoming Bankrupt
You should fully understand the restrictions which bankruptcy may place on your life before declaring yourself bankrupt.
If you can avoid bankruptcy by entering into a Debt Agreement or a Personal Insolvency Agreement, you may be able to avoid some of these restrictions which bankruptcy may place on your life.
How long will bankruptcy last?
In most cases bankruptcy will last 3 years, however, the 3 year time period only commences from the time you file your Bankruptcy Statement of Affairs with AFSA. Your bankruptcy term can also be extended by up to 5 years (so your bankruptcy term can become 8 years in some cases).
Learn how your bankruptcy term can be extended.
What other restrictions will I experience whilst bankrupt?
- You will have to surrender your passport and international travel will need to be approved in writing by your trustee
- You will have to disclose your bankruptcy status when applying for credit whilst a bankrupt
- You may need to disclose your bankruptcy status to your employer or industry association
- You may be liable to pay compulsory income contributions to your trustee
- You will not be able to own a car worth more than the limits
- You will not be able to own tools of trade worth more than the limits
- Your trustee may sell some of your personal effects if they are not protected
- Your bankruptcy trustee may seek to publicly examine you
- Your bankruptcy trustee will ask you to deliver your financial records for examination
- You will not be able to act as a company director
- You may unknowingly commit an bankruptcy offence under the Bankruptcy Act which may lead to prosecution.
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