Will I lose my superannuation if I go bankrupt?

Generally, your superannuation is protected during bankruptcy. However, any recent or excessive contributions may be reviewed by the trustee.

Can my accountant manage my bankruptcy?

No. A registered trustee is appointed to manage your bankruptcy — not an accountant or bookkeeper.

Does bankruptcy impact my spouse or partner?

Your bankruptcy does not directly affect your spouse or partner’s credit or assets unless debts are shared or jointly held.

Will I lose my car if I go bankrupt?

You may keep your car if its value is below a certain threshold or if it's essential for work. The trustee assesses equity and necessity.

Will bankruptcy affect my job or future employability?

Bankruptcy does not automatically prevent you from working. Some professions have licensing restrictions, but most employment remains unaffected.

Does bankruptcy clear all tax debts?

Not always. Some tax debts, especially where fraud is involved, may not be cleared. But most ATO debts are covered.

Are all debts wiped by bankruptcy?

No. Secured debts, child support, HECS/HELP loans and fines may not be wiped. It’s important to review debt types carefully.

Will I lose access to bank accounts or money?

No. You can keep a bank account and access funds, although the trustee monitors your income and must approve large transactions.

Can I file for bankruptcy myself?

Yes. You can file for bankruptcy yourself via AFSA. However, it’s wise to get advice before proceeding.

Will I lose my home during bankruptcy?

Not necessarily. The trustee may sell your home if there's equity. Each situation depends on ownership structure and debt.

Is bankruptcy expensive to file?

No. There’s no government fee to lodge bankruptcy with AFSA, but you may have legal or advisory costs depending on your situation.

Bankruptcy Myths: Check Your Facts

Navigating the turbulent waters of bankruptcy is fraught with myths and misconceptions. This guide serves as your compass, helping to steer clear of common misunderstandings and chart a course towards financial recovery. Understanding the true nature of bankruptcy can help you sail towards a more stable future; you can test your knowledge before you hover over the answer as we dispel some common misconceptions about bankruptcy.

Bankruptcy will clear my tax debt.

Bankruptcy may not clear all tax debts. Some tax obligations, especially recent ones, may not be dischargeable. It's crucial to consult with a professional for advice on your specific tax situation.

I will have to forfeit my home.

Your home is not automatically exempt from bankruptcy. However, there may be ways to keep your home, depending on your circumstances. Professional advice is essential to explore your options

I can have my accountant or bookkeeper manage my bankruptcy.

A trustee is appointed to manage your bankruptcy. This can be a registered trustee or the Official Trustee (AFSA)

All of my income goes towards bankruptcy claims and payments.

You can earn and save money during bankruptcy, but if your income exceeds a certain threshold, you may need to contribute towards your bankruptcy. The threshold varies based on the number of dependents.

I will lose my car.

You can keep your car if its value is below a certain threshold; it's your primary mode of transportation, and you continue making any necessary payments.

It will cost me a lot of money to declare bankruptcy.

There is no fee to lodge a bankruptcy form with AFSA. However, if you appoint a private trustee, there may be costs involved.

I can file for bankruptcy myself.

You can file for bankruptcy yourself, but it's advisable to seek professional advice due to the complexity of the process. A debt specialist can assist with paperwork and lodge it on your behalf.

Declaring bankruptcy will impact my spouse or partner.

Your bankruptcy does not directly affect your spouse or partner unless you have joint debts or your financial situations are intertwined.

I won't have access to money or bank accounts.

You are allowed to have a bank account and can access money for living expenses. However, if your income exceeds a certain threshold, you may need to make contributions to your estate.

My job and employability will be affected.

While bankruptcy itself does not prevent you from being employed, it may affect your ability to work in certain professions or to obtain a license in some trades.

My bankruptcy will not be publicly recorded.

Yes, your bankruptcy will be recorded on the National Personal Insolvency Index (NPII), which is a public record.

I will lose my superannuation.

Generally, your superannuation is protected during bankruptcy. However, contributions made to superannuation that are above the ordinary level to defeat creditors can be recovered.

All my debts will be cleared.

Not all debts are cleared in bankruptcy. Certain types of debts, such as secured debts, child support, and fines imposed by a court, are not discharged by declaring bankruptcy.

Our Bankruptcy Strategies

“With over two decades of experience, and over 500 bankruptcies we are well-versed in the nuances of the bankruptcy process.”

Thyge Trafford - Jones - Bankruptcy Trustee

Engaging a trustee in a bankruptcy scenario ensures that the process is handled efficiently, legally, and with a professional approach.

With TTJ advisory by your side, we can provide you with a structured pathway through the complexities of bankruptcy, ensuring that all legal, financial, and administrative aspects are appropriately managed.