Detailed Product Description

What is bankruptcy?

Bankruptcy involves an exchange. You hand over control of your property and finances to a Trustee (the person who takes control over your property) in exchange for protection from legal action by your creditors (the people/companies you owe money to). You do not have to have a minimum amount of debts or property to enter bankruptcy.

Some of your assets (property you own) may be sold to pay your debts. If your annual income is over a certain amount you must make payments to your Trustee, which go towards paying your debts.

Bankruptcy usually lasts 3 years but can be shortened (applies only to persons who became bankrupt before 5 May 2003) or extended. At the end of the bankruptcy your debts (with a few exceptions) will be cleared.

Advantages of bankruptcy

Most debts are cleared when you are discharged from bankruptcy. Examples of debts not cleared by bankruptcy are:

• Court fines
• HECS debts
• Child support payments
• Debts incurred by fraud
• Student Loans

You will need to continue to make these payments while you are bankrupt.

Once you become bankrupt your creditors and their debt collectors must cease collection of the debt(s) from you.