Property

Your property vests in the Trustee as your Trustee in Bankruptcy and is available for division amongst your creditors by reason of Sections 58 and 116 of the Bankruptcy Act. In effect, this means that all of your assets are now legally owned and controlled by the Trustee and are to be applied for the benefit of your creditors.

Your property includes anything of value belonging to you at the date of bankruptcy, together with items obtained by you, or which are given to you, before your discharge from bankruptcy including any cash in bank, negotiable securities or jewellery.

You are required to disclose to the Trustee details of all such property; any failure or refusal to do so is an offence under the Act (refer Offences below).

You should not sell or deal with any of your property or items of value - only your Trustee or a secured creditor is able to do so.

Certain property is exempt from vesting in the Trustee (refer Section 116 of the Act). That property includes necessary household furniture, personal effects, tools of trade and plant & equipment to the value of $2,900, and a motor vehicle to the value of $5,800 (or as increased per CPI adjustments). It also includes some life insurance policies and compensation awarded for personal injuries or wrongs to yourself, your spouse, or a member of your family. Note however, that such exemption does not prevent the excepted items of property from being sold by a creditor who holds security over such items.

Books and Records

It is hereby requested that you forward to the Trustee all books and records or other documentation in relation to any business operated by you as well as in relation to your personal affairs including the following:

(a) details as to bank accounts operated by you; in particular issued cheque butts, deposit books, bank statements in relation to any such accounts;
(b) copies of income tax returns, profit and loss accounts and balance sheets, if any, or other financial statements prepared by you or on your behalf during the last five years;
(c) bank passbooks.

Contributions from Income

From 1st July, 1992 contributions are compulsory where income exceeds an amount set by the Act. This amount varies taking into account obligations such as taxation, dependants, maintenance and child support. Your Trustee is able to enforce payment of compulsory contributions by direct deduction from your income if contributions are not paid.

The contribution amount is 50% of your net income above your Actual Income Threshold Amount (AITA). Your AITA will be calculated by the Trustee with regard to the following:

1) Income from all sources.
2) Actual tax paid.
3) Any ongoing liability under the Child Support (Assessment) Act, 1989 or under the Family Law Act 1975.
4) The number of persons wholly dependent on you for support.

For the purpose of calculating the amount to be contributed, income includes money received by you plus associated benefits. For example discounted travel, employer subsidised housing or board, or private use of employer's motor vehicle.

The Trustee will assess what contributions are due and will issue you with notification of the amount and frequency contributions are to be paid.

Every year (or as determined by your Trustee), you will be required to provide to your Trustee details of income for the past year and an estimate of income for the following year. The information provided will be used to determine the amount of contributions you must pay.

If you fail to provide these details an objection to your discharge may be entered and your Trustee will calculate contributions payable on information available.

Co-operation and Disclosure

Pursuant to Section 77 of the Bankruptcy Act, you are required to:

(a) deliver immediately to the Trustee all books (including books of an associated entity) that are in your possession relating to your examinable affairs;
(b) attend the Trustee’s office to give information concerning your conduct and examinable affairs at such times as the Trustee reasonably require;
(c) attend a meeting of creditors whenever the Trustee requires;
(d) give information to those meetings concerning your conduct and examinable affairs;
(e) assist in realising property as required by the Act;
(f) disclose to the Trustee any property that is acquired by you, or devolves on you, being property divisible amongst your creditors;
(g) aid to the utmost of your power in the administration of the estate; and
(h) deliver immediately to the Trustee your passport:

Pursuant to Section 78 of the Act, you may be arrested and imprisoned if you:

(a) conceal, or without the Trustee’s permission remove, any property; or
(b) neglect without good cause or fail to comply with an Order of the Court or with any obligation under the Act, including the requirement to prepare and file a Statement of Affairs.

Offences

Section 265 of the Act provides for a penalty of one year's imprisonment if you:

(a) fail to fully and truly disclose to the Trustee all of your property and its value, to the best of your knowledge and belief;
(b) fail to fully and truly disclose to the Trustee particulars of any disposition of property made by you within two years preceding the date of bankruptcy, to the best of your knowledge and belief;
(c) refuse or fail to comply with a direction of the Trustee to deliver up property in your custody or under your control;
(d) fail to fully and truly disclose to the Trustee such information about your conduct and examinable affairs as the Trustee require;
(e) refuse or fail to tell the Trustee where the books (including books of an associated entity of yours) relating to any of your examinable affairs may be found;
(f) refuse or fail to comply with any direction of the Trustee to deliver to the Trustee books (including books of an associated entity of yours) that are in your possession and relate to any of your examinable affairs;
(g) fail to inform the Trustee of a false proof of debt of which you are aware;
(h) do not give the Trustee a full and proper explanation of any loss or depreciation of your assets that occurred within the period of two years preceding the date of bankruptcy; and
(i) omit any material particular from a statement relating to your examinable affairs.

Section 272 of the Act provides for a penalty of up to three years imprisonment for a bankrupt who, before discharge and without the consent in writing of the trustee, leaves Australia or does an act preparatory to leaving Australia.

Section 149A of the Act provides that if you leave Australia without permission and an objection to your discharge is lodged the period of your bankruptcy will be extended to a minimum of 8 years from the date you return to Australia.

Restrictions As An Undischarged Bankrupt

In ordinary circumstances, you will remain a bankrupt until discharged automatically three years from the date you filed your Statement of Affairs. If you fail to co-operate with the Trustee or to comply with the requirements of the Act, that period may be extended by the Trustee’s objection.

In the meantime you are an "undischarged bankrupt" and as such you are restricted from obtaining credit and carrying on business under another name without disclosing that you are an undischarged bankrupt to all persons with whom you deal. The restrictions are contained in Section 269 of the Act, to which you are referred for detailed requirements. In summary you shall not, either alone or jointly with another person:

(a) obtain credit of $3,951 or more;
(b) obtain goods or services by drawing a cheque (or other financial instrument) for $3,951 or more;
(c) enter into an agreement for lease or hire of goods when more than $3,951 is involved;
(d) obtain goods or services by promising to pay $3,951 or more;
(e) obtain an amount of $3,951 or more in exchange for a promise to supply goods or services;
(f) carry on business alone, or in partnership, under a name other than your own.

without disclosing your undischarged bankrupt status.

There is a penalty of imprisonment for three years for breaching any of these provisions. Please note that the amount of $3,951 will be indexed by the All Groups Consumer Price Index each quarter.

Corporations Act

It is important to note that under the Corporations Act an “insolvent under administration” is prohibited (without leave of the Court) from acting as a director, or a promoter, or being in any way, whether directly of indirectly, concerned with, or taking part in, the management of a corporation (penalty $5,000 or imprisonment for one year, or both) until such time as you are discharged or the bankruptcy annulled under the statutory provisions of the Bankruptcy Act.

An extract of the relevant Sections of the Corporations Act (Sections 206A to 206H) is attached for your information.

Restrictions on Overseas Travel

You are not permitted to travel overseas without the consent of your Trustee and as referred to above, you are requested to surrender your Passport/s to the Trustee.

If you are required to pay compulsory contributions, you must make written application to the Trustee for approval to travel overseas.

Discharge from Bankruptcy

The Act now provides that the period of bankruptcy will be for 3 years from the date of filing your Statement of Affairs. Your bankruptcy may be extended to 5 years or 8 years if an objection is entered. If you have not filed your Statement of Affairs your bankruptcy could be more than 8 years.

Objection will extend your Bankruptcy

The grounds upon which an objection may be lodged are specified in Section 149D of the Bankruptcy Act and whilst some of the grounds have been referred to earlier in this letter, we summarise Section 149D in general terms as follows:-

Extended to 5 years if you:

* leave Australia and do not return
* have made any undervalued transactions or preferential payments to creditors
* have continued to manage a corporation without leave of the Court
* engage in misleading conduct in relation to a person in respect of an amount, or amounts the total of which, exceeds $3,951
* fail, whether intentionally or not, to disclose a liability existing at the date of bankruptcy
* fail to advise the Trustee/s of any material change that occurred in the time between you becoming a bankrupt and lodging your Statement of Affairs or, if the change occurs later, as soon as possible after the change occurs
* fail to inform the Trustee/s of a change of name or address of your principal place of residence
* fail to attend a meeting of creditors without first having obtained prior written approval or without having given a reasonable explanation
* fail to attend an interview or examination without reasonable explanation
* fail, whether intentionally or not, to disclose a beneficial interest in any property

Extended to 8 years if you:

* make any transfer to defeat creditors
* fail to comply with a request to provide written information about your property, income or expected income
* after the date of bankruptcy, you intentionally provide false or misleading information to the Trustee
* fail to disclose any particulars of income or expected income as required by a provision of the Bankruptcy Act
* fail to pay a contribution amount that you are liable to pay under a provision of the Bankruptcy Act
* at any time within 5 years prior to your bankruptcy, you either
(i) spend money but fail to explain adequately the purpose to the Trustee, or
(ii) dispose of property and fail to explain adequately why no money was received or what you did with the money received
* are overseas and fail to return to Australia when requested by the Trustee
* intentionally fail to disclose to the Trustee a liability that existed at the date of bankruptcy
* refuse or fail to sign a document when lawfully required by the Trustee to sign
* intentionally fail to disclose to the Trustee beneficial interest in any property

Review of Trustee Decision

If you are not satisfied with a decision made by your Trustee, you may request a review of the decision by the Inspector-General in Bankruptcy and/or the Administrative Appeals Tribunal.

Do You want your Bankruptcy Annulled?

If you strive to pay your debts your bankruptcy may be annulled. Your Trustee can cancel your bankruptcy by issuing a certificate of annulment when:

* all your debts and costs of administration of your bankruptcy have been paid in full, or

* you make an offer of composition which is accepted by your creditors. A composition is an offer of a sum of money in full and final payment of your debts. It must be accepted by your creditors at a meeting and you must satisfy the terms of the offer, or

* through your Trustee you enter into an arrangement with your creditors where you offer to pay a sum of money over a period of time which is accepted in full and final settlement of your debts when payment is completed.

Change of name or address: or of employment, occupation, business or profession

Section 80 of the Act requires that you, as a bankrupt, must notify the Trustee in writing of any change in your name or address or any other particular contained in your Statement of Affairs that occurs during your bankruptcy. The Trustee also requires your written advice of any change in the nature of your employment, occupation, business or profession (penalty $100 or six months imprisonment).