Declaring Bankruptcy – FAQ 2019-05-29T07:48:33+00:00

What happens to my Centrelink debts if I go bankrupt?

As a general rule we have always told our potential clients not to count on having your Centrelink debt written off when you declare bankruptcy, however it seems more and more this is not the case.

In most cases it has been our experience that Centrelink will not pursue you for your Centrelink debts*(which is also outlined on the Centrelink website – see link below) for the three years you are bankrupt which is good news for those struggling week to week and need to file for bankruptcy to get some financial relief. What seems to be happening more and more lately is that they (Centrelink) may now just simply write the debt off at the end of the three years also. We had a client just the other day send us a Centrelink letter (See below) stating that not only that they wont pursue the debt for the 3 years of bankruptcy but also that they wont chase you for the debt after you have been discharged. In other words you wont ever have to pay back your Centrelink debt if you file for bankruptcy.


Can I travel offshore?

Yes. All you need to do is apply to your bankruptcy trustee for permission to go. You’ll get it, but there is a one-page form you need to fill in simply to inform the trustee of how long you will be traveling, etc. This measure is really only there so high flyers don’t skip the country. In some cases the trustee will call for your passport, but don’t stress about it because you can ask for it back when you want to take a trip. Call us if you wish to know more about travel on 1300 795 575.

Can I keep my property?

Oftentimes the answer is yes! As a matter of fact, in many cases these days we can help you keep your home. At Bankruptcy Experts we are professionals at aiding people keep their houses. It’s potentially very complicated, so if you are concerned about losing your home call us on 1300 795 575 and we will walk you through your alternatives.

The prospect of losing the family home is probably the most typical deterrent to people declaring bankruptcy. We chat with people daily who have fought for many years under extensive financial pressure so they don’t lose their home.

So how is it possible to become bankrupt and keep your house? Easy, really; it’s a matter of equity. Let’s put it like this, if you have a house that’s worth $350,000 and you owe the bank $350,000 you effectively have no equity in the house, correct? The trustee will only sell your home if there is sufficient equity in the home if sold to pay back a number of your debts. So in this particular instance, the trustee will then provide you some alternatives, one of which is to simply to continue paying the mortgage and stay in the house while you are bankrupt.

So how can I find out the value of my home? A simple way is to go onto au and check out the sold houses tab in the Port Macquarie area and it will show you all the recent sales in your location. Another choice, if you are not sure or are very concerned, is to have a registered valuer do a valuation on your home, not a real estate agent (unless they are registered valuers, naturally). Be advised this will cost you somewhere between $300-700. Just another thing about house prices. If the trustee wants to sell your house they do this reasonably quickly. It’s not a 6-month glossy advertising campaign and instead it’s often by auction and they just meet the market on the day and that’s it. So when considering the value remember it’s a sell now price, not when the market improves.

Once you have figured out the resale value of your house the next thing to examine is ownership.

Generally most home loans are between 2 people as joint tenants who both contribute to the home loan. If only one party is going bankrupt then the equity is worked out like this.

Say the house is worth $400,000 and the current price is $350,000. Then the balance of equity in the home is $50,000, right? Half of that total equity is automatically allocated to the party not going bankrupt, leaving $25,000 for the bankrupt. Out of that $25,000 the bankrupt party has to pay for all of the selling costs including promotions etc., which, according to where you live, can cost anywhere between $12,000-20,000. In this particular case say the selling expenses are going to be $15,000 then the remaining left over after the sale is $10,000. So in this case the trustee will give the non-bankrupt party several options. One of which is common is for the bank to say, “Pay us the $10,000 and we won’t sell the house and you will have it eliminated as an asset from the bankrupt’s estate.” Or, simply put, work out a deal to pay the $10,000 and you can keep the house.

Just a side note: the lender who has given you the property loan will need the payments to be maintained naturally. No matter what the trustee decides, if you don’t pay the financial institution the mortgage they will ultimately ask you to leave. So, in other words, keeping your house obviously implies keeping the home loan also.

There are plenty more options with your house, and we have just detailed one option of potentially 20 alternatives you can select from, when it pertains to your house. We understand you have to get this right. Gambling with the family home can be a distressing business. If you want to get the right advice or you just need to talk to someone give us a call on 1300 795 575.

When would my overseas travel be hampered?

Your travel would be restricted by the trustee as a result of adverse legal action. For example, if your bankruptcy is a part of a criminal investigation or fraudulent activities, it’s possible the trustee will restrict your travel.

What happens to my credit rating?

Bankruptcy lasts 3 years and will stay on your credit report for that time. Nevertheless, just like any default it will show up on your credit record for 7 years. You can have it eliminated if you get your bankruptcy annulled.

Will I ever have the capacity to borrow money again once I’m bankrupt?

Bankruptcy lasts 3 years, and in that time you will not get a loan. After the 3 years is finished you will have the ability to get loans; you just won’t get the greatest rate. Your credit file will be wiped clean 4 years after you have been discharged as a bankrupt then you will have an excellent credit history again and you will get the most competitive deal on loans.

Will I lose my car if I go bankrupt?

Normally no. Bankrupts rarely lose their cars because they’ve gone bankrupt. Of course, this is conditional and we can let you know if yours is safe. Call Bankruptcy Experts Port Macquarie on 1300 795 575.

There is a threshold or amount of wholesale value your car could be worth while you are bankrupt, which is $7,350. You will find all kinds of inaccurate information about this on the internet, but here are the facts. That $7,350 represents not the total value; it represents equity. So, in other words, if you have a car worth $35,000 you are paying off or leasing and the amount you could sell it for is $30,000 then you can keep your car because its equity is only $5,000. The company that provided you the cash for the car will be pleased for you to keep the car although you are bankrupt as long as you maintain the payments.

What if I’m behind on my car payments and I go bankrupt; will they reposess my car?

Get some advice on this one. If you need some advice at this moment just call 1300 795 575. Basically, you will get about 2 to 3 payments grace when it comes to car loans. The bottom line is simple: whether you are bankrupt or otherwise, if you miss 3 or more monthly payments on your car loan the bank will repossess the car. Don’t think because you are going bankrupt you are automatically going to lose your car because most of the time we help people keep them.

When are the creditors informed of my bankruptcy?

The creditors, or individuals you owe money to, are informed in writing at about the same time you receive your bankruptcy file number.

Will anyone visit my home?

No. The bankruptcy procedure is essentially a paperwork exercise. The only thing that actually takes place is you will either be sent a letter by snail mail or emailed a letter notifying you that you are bankrupt. At Bankruptcy Experts Port Macquarie we make sure that this entire process is that straightforward, so if you have questions about this phone 1300 795 575.

Can I have my bankruptcy annulled?

Yes. This process will take about 2 weeks and will entirely remove the bankruptcy from your credit history. There are provisions within the Bankruptcy Act that permit a bankrupt individual to have their bankruptcy annulled through a Section 73 proposal.

The repercussions of creditor’s claims can often result in bankruptcy, despite regardless if it was the individual’s choice to enter bankruptcy, or if it was filed by a creditor. However, bankruptcy is far from the end of the world for the person who experiences bankruptcy.

We have been helping people in the Port Macquarie area for several years so call us today on 1300 795 575 to get some assistance on this issue. We work out the most suitable possible course of action for you to get back up and running, eradicating residual effects and obstacles of past financial situations to give you the best possible outcome. Having experience and skills specialising in Section 73 proposals, we can combine this with our proven solutions and tactics to bring you through bankruptcy unharmed, ready to start over.

Can I get my bankruptcy annulled?

First of all, having your bankruptcy annulled is basically reversing it 100 %. So if you are contemplating you would like to have your bankruptcy annulled there are a few things you should know.

Firstly, how does the annulment work? A simple way to comprehend it is let’s say someone owes you $50,000 and they haven’t paid you one penny back for many years. Then to make things worse you find out that they have filed for bankruptcy. You would kiss that money goodbye, right? Many years pass and they come to you with an offer to pay you $5,000 that their grandma is giving to them to settle your debt with them. Naturally you are happy to take it, because it is better than a kick in the teeth. The only condition they ask for in return is that you agree to have the bankruptcy wiped from their credit history, and if you don’t agree to do that then there will be no $5,000. Of course you don’t care about their record; you are just happy they are offering you some money after all these years.

In bankruptcy terms this technique is typically referred to as a Section 73 proposal, and it’s an approach where “everybody wins.”.

Essentially the trustee approaches your creditors, proposes your offer, which is dramatically less than the original amount owed, on the condition they clear your credit history clean.

This process takes a few weeks. The proposal could be done at any time in the 3 years you are bankrupt. However, you need to bear in mind the timing of your proposal. Because it does cost money to do this, you need to make sure the odds are on your side. For instance, if you are paying back money to the trustee each week because you earn over the threshold amount, then your creditors will know they are going to receive a certain amount from you over the 3 years regardless so it better be more than that will add up to.

If you have only been bankrupt 3 weeks it will be tougher to get an annulment because they could get some income from you over the 3 years if you earn over the threshold sum of money.

If you want help to put a section 73 proposal to your trustee or just desire more details about the timing of when to put an offer forward, just give us a call on 1300 795 575.

Can I go bankrupt if I’m currently in a Debt Agreement or Personal Insolvency Agreement or in a Debt Consolidation Loan Contract?

Yes! We can assist you get out of all of these arrangements. With Debt Agreements and Personal Insolvency Agreements we need to have you discharged from them first before you declare bankruptcy, but it’s not a problem. If you are locked into one of these and just can’t get on top give us ring at 1300 795 575.

What debts won’t bankruptcy wipe out?

There are very few debts that bankruptcy won’t 100 % wipe out, like Centrelink, child support, HECS and a court-imposed fine (speeding fines, etc.) and, finally, money owed to an insurance company because of a car accident in an uninsured car that you were driving.

Aside from that, it will eliminate things like your credit cards, store cards, GST and tax, unsecured personal loans, etc. Essentially, there are a lot of things to list so if you have a particular debt you are stressed over just ask for a free consultation 1300 795 575.

Is there a limit to the amount of debt I can go bankrupt for?

You can’t file for bankruptcy for an amount below $5,000; however, there is no limit beyond that. If you owe a couple million dollars, that’s dealt with no differently than $20,000.

What is the difference between a secured and unsecured debt?

An unsecured creditor is a creditor who does not have a hold over the chattels/assets/property purchased with the credit given to you. Such liabilities include credit card debts.

A secured creditor has a hold over the chattels/assets/property until the debt is paid completely. If a debtor defaults on a secured obligation, the creditor has the right to repossess and sell the chattels/assets/property to pay down the debt.

How can I make sure that you will be successful in making me bankrupt?

We have helped thousands of people apply for bankruptcy for many years and we have never had anyone’s application rejected. That’s why we offer a 100 % money back guarantee.

What if I’m not completely sure who I owe money to?

There is a simple technique we use here, and all you have to do is get a copy of your credit file as it will have your credit history on there. Companies like will have the capacity to get you a copy for a modest fee.

I’ve had a motor vehicle accident. Will the debt be covered in bankruptcy?

Motor vehicle accidents can possibly be challenging, so to keep it simple call us on 1300 795 575 to get the right advice on your situation. However, as a general rule, if you were driving a motor vehicle that was not insured then the expense of the repairs is not eliminated with bankruptcy. Having said that, it depends who admitted liability or who was at fault. If you go to court and the court demonstrates you were not at fault then you should be okay.

Can I have business debts wiped out with my bankruptcy also?

Yes! We can help you accomplish this, although it’s possible there are effects and a number of regulations around this process, so give us a call and we will direct you through the procedure on 1300 795 575. Bankruptcy Experts Port Macquarie are professionals at assisting businesses get back on their feet.

Can I pay out my bankruptcy debt and have it annulled?

Yes. There is a course of action to follow, but if you win lotto or inherit some funds you can use it to get your slate wiped clean. There is a way of accomplishing this properly; just phone us first.

What if someone is bankrupting me; is there anything I can possibly do?

Generally, if you owe money to someone they can obtain a court order and bankrupt you. They have to follow a process, but it is feasible. What you need to avoid at all costs if possible is another person bankrupting you, as it’s always best to voluntarily declare bankruptcy. Unless you enjoy court cases and harassing phone calls, of course.

What if my company has received a Demand or Wind-Up notice; can I still go bankrupt?

Yes. However, this is a complicated process and we suggest you get some qualified advice; if its handled incorrectly, it could be fatal. For a free consultation contact Bankruptcy Experts Port Macquarie 1300 795 575.

Do I need to contact my creditors?

No, we do that for you. In fact, we serve as a buffer or a midway point between you and your creditors. So essentially you are not required to inform them of your bankruptcy; we take care of that for you.

How long does bankruptcy last?

Three Years.

How long does it take to file for bankruptcy?

Usually, it takes about 2 weeks.

What if someone else signed for a loan (joint loan or guarantor) and I go bankrupt; will they still be liable for the debt?

Yes. Typically a lender will pursue the other person who signed the loan papers with you for the full amount of the remaining debt owing on the loan.

What happens to a debt I failed to remember at the time of becoming bankrupt?

Don’t panic! If you overlooked a debt and remembered it later, just contact your trustee with the name of the creditor, address, date the debt was acquired, sum of debt and any account or reference number/s provided by the creditor. Your trustee will add the creditor to your bankruptcy and send out a notification to the creditor.

Do I have to go to court if I go bankrupt?

No. We deal with the entire procedure for you.

What if I have gambled a bit of my income and I go bankrupt; will I get in strife?

Normally this is not a problem, so if you are a gambler, don’t worry. What the trustee doesn’t like is inconsistency here. Put simply, you have never taken a chance in your life and all of a sudden you lost $50,000 on the ponies, then you might have some explaining to do, of course, because it just doesn’t add up.

Can my bankruptcy be done over the phone?

Yes. We understand you are busy. If you have a phone we can help you; simply call us on 1300 795 575.

What if I’m living overseas; can I still file for bankruptcy?

Yes. This is attainable. It requires some emails back and forth but it can be carried out.

Can I include my foreign debts in my bankruptcy?

Yes. If an individual originally living in another country now residing in Australia then files for bankruptcy and they have a debt incurred in that foreign country, you simply list that debt on the paperwork.

In many cases the creditor overseas will wipe out the debt. It is possible and legal for them, however, to reject your application, and if you return to that country you may be subject to their bankruptcy laws.

How will the trustee know what assets I have?

There are a few ways the trustee can find out, and the most effective and quickest way is for you to let them know when we do the paperwork. There is also a government website which has major assets listed also. You ought to get some advice about assets; be careful.

Can I keep an inheritance if I file for bankruptcy?

This is tricky and you will need the right guidance, so if you need more information about inheritances give us a call on 1300 795 575.

Will I lose my Pension or Workers Compensation payments if I go bankrupt?

No. The income thresholds are the same for everyone so regardless of how you earn your income you need to earn about $50,000 each year before your income will be impacted by bankruptcy.

Will I be able to keep my income tax return once I’m bankrupt?

Yes, if you owe the Australian Tax Office money. Put simply, if none of your debts is tax debt, then no, the ATO will keep the cash you owe them.

No, if you don’t owe the ATO money. Your income tax return is deemed net income, so if you are below the threshold amount you can earn while bankrupt then you will get your entire tax return back.

What about child support ?

If you are required to pay child support, this amount will be deducted from your net income, so what you have the ability to keep after you pay your tax and then child support is considered net income. That is why in the world of bankruptcy net income numbers are always quoted.

Can I buy shares and make investments while I’m bankrupt?

Yes, you are permitted even while you are bankrupt, but the trustee will take them off you, as they are considered an asset.

What assets can I keep if I go bankrupt?

You can keep just about everything except big things like houses, cars, shares and inheritances. Even things like houses and cars may be able to be spared. Just phone us before you make any rash decisions on 1300 795 575 for Bankruptcy Experts Port Macquarie.