Fill - Free fillable Debtorpack-1115-re-8 Debtor's Pack

YOUR REQUEST FOR PERSONAL INSOLVENCY FORMS/INFORMATION

Please find enclosed the forms / information reques

ted.

NOTE: When returning forms to AFSA electronically, please ensure the total size of your

email including attachments does not exceed 6MB. You may need to scan your

documents at a lower resolution to minimise the size of your attachments.

Privacy statement: If you choose to enter into a personal insolvency arrangement, you

will need to complete forms that require the provision of ‘personal information’ (as

defined in the Privacy Act 1988). This information is collected under, and for the

purposes of, the Bankruptcy Act 1966 or related legislation.

Some information may be included on a public record, the National Personal Insolvency

Index and/or may be available for public inspection. Information may be disclosed for

law enforcement purposes and, in some circumstances, to overseas recipients.

AFSA’s privacy policy provides further information regarding the collection, storage, use

and disclosure of personal information, including how you may: (i) access your personal

information; (ii) seek to have that information corrected; and (iii) complain if you feel your

privacy has been breached, along with information on how your complaint will be dealt

with. The privacy policy can be accessed at www.afsa.gov.au/privacy or you can

request a copy from AFSA.

National Service Centre

Phone: 1300 364 785

Post: GPO Box 1550, Adelaide SA 5001

Email: info@afsa.gov.au

CL(FX)112015

Supporting better outcomes for consumers, business and the community.

www.afsa.gov.au

ervices

Bankruptcy

Essential forms and information

If you decide to apply for bankruptcy you will need to do the following:

1. Complete a debtor’s petition form, ensuring you have fully completed all relevant sections#

2. Complete a statement of affairs form, ensuring you have fully completed all relevant sections.

3. Ensure you have read, understood and signed the prescribed information, located ^ci]ZYZWidgheZi^i^dc[dgb#

Send your completed application within 28 days of signing to:

Email: registry@afsa.gov.au

Post: GPO Box 1550, ADELAIDE SA 5001

Note: If you have arranged for a registered trustee to administer your estate you must ask your trustee to complete a

‘consent to act as trustee’ form and lodge it along with your debtor’s petition and statement of affairs. If a completed

‘consent to act as trustee’ form is not lodged with your application, the Ofﬁcial Trustee (AFSA) will act as your trustee or

arrange with your creditors to appoint a registered trustee.

DO NOT USE THIS SET OF FORMS IF YOU HAVE ALREADY BEEN MADE BANKRUPT UNDER A SEQUESTRATION

ORDER

Getting help

The consequences of bankruptcy are serious and cannot be cancelled if you change your mind.

Financial counsellors help people in ﬁnancial difﬁculty, and are available in every State and Territory. Their services are

free, independent and conﬁdential. You can talk to a ﬁnancial counsellor from anywhere in Australia by phoning

1800 007 007 (minimum opening hours are 9.30 am – 4.30 pm Monday to Friday). This number will automatically direct your

call through to a ﬁnancial counselling service in the State or Territory closest to you.

IS(Bankruptcy Essential)0+2014

Page 1 of 1

?jcZ2014

Supporting better outcomes for consumers, business and the community.

www.afsa.gov.au

Insolvency

Services

Debtor’s petition

instructions and form

Instructions on how to complete the debtor’s petition form

1. Use blue or black pen.

2. Complete all relevant sections of the form.

3. Please provide proof of identity – the Ofﬁcial Receiver will not accept your petition for bankruptcy unless you

provide sufﬁcient information to enable us to conﬁrm your identity. Details from two (2) types of identiﬁcation

outlined in the table below are required. The identiﬁcation must be current (forms of identiﬁcation that have

expired are not acceptable).

In the form, you must list in column A the type of identiﬁcation you are relying on eg driver’s licence, passport etc. In

column B, write your name as it appears on the form of identiﬁcation provided, and in column C the licence, membership,

customer or document number associated with the form of identiﬁcation eg the passport or driver’s licence number.

Acceptable forms of identiﬁcation

Australian driver licence Current state or territory issued driver licence, learner permit or provisional licence

showing your name, signature and/or photo

Medicare card Current Medicare card showing your name

Australian birth certiﬁcate Australian birth certiﬁcate, birth certiﬁcate extract or birth card in your name/former name

Australian passport Current Australian passport in your name/former name. Expired passports are not

acceptable

Citizenship certiﬁcate Australian citizenship certiﬁcate in your name/former name

Defence force identity card Issued by the Australian Defence Force, showing the same name as in your petition and

photo or signature

Passport issued outside

Australia

Current passport issued by a country other than Australia, with a valid entry stamp or visa

Student identiﬁcation card Current student ID card issued in your name with signature and/or photo (school, TAFE,

university, registered training organisation)

Proof of age card Current proof of age photo identity card issued by a government agency in your name with

photo and/or signature.

Please note: while identiﬁcation information is required for acceptance of your petition, you are NOT required to attach

copies of the acceptable forms of identiﬁcation with your petition.

Knowingly providing false and/or misleading information is an offence under the Bankruptcy Act and penalties apply upon

conviction. Your period of bankruptcy can be extended in certain circumstances.

IS(DebtorsPetition)0+1

Page 1 of 2

?jcZ 2014

Supporting better outcomes for consumers, business and the community.

www.afsa.gov.au

Information and assistance

If you do not understand a particular question or require further information about bankruptcy or other alternatives,

please contact AFSA on 1300 364 785. AFSA cannot give you advice on whether bankruptcy is suitable for your individual

circumstances.

If you do not speak English, the Translating and Interpreting Service is available for the cost of a local call from anywhere in

Australia by phoning 131 450.

How your information is used

The information you provide on these forms is collected under, and for the purposes of, the Bankruptcy Act.

1. A copy of these forms will be provided to the trustee of your estate, who will use the information in them to

administer your estate.

2. The information you provide (except Part A of the statement of affairs) is available for public inspection.

3. The information may be used for the purpose of investigating offences committed under the Bankruptcy Act or

other legislation.

4. Some of the information will be recorded on the National Personal Insolvency Index (NPII) which is a public

record. It records personal information including the type of administration, your name (including previous names

and aliases), your address, date of birth and occupation. Credit rating organisations have access to the NPII,

therefore presenting a debtor’s petition is likely to affect your ability to obtain credit. The Inspector-General is also

permitted to enter into arrangements to provide NPII information to other third parties.

Can my application for bankruptcy be rejected?

Yes it can, if:

1. you have not provided appropriate proof of identity details; or

2. the Ofﬁcial Receiver believes that you can pay all your debts within a reasonable time AND either:

• you have previously been bankrupt three (3) or more times, or once in the last ﬁve (5) years, or

• you are unwilling to pay one or more creditor, or creditors in general

If you are dissatisﬁed with the Ofﬁcial Receiver’s decision not to accept your debtor’s petition you may appeal the decision

to the Administrative Appeals Tribunal (AAT).

Applications by physically incapacitated persons and/or persons unable to read

If an applicant is unable to read, is insufﬁciently familiar with the English language or is unable to sign/complete the form

due to a physical incapacity, another person may complete the form if:

1. where the applicant is blind, partially sighted, illiterate or partially literate – the person has read the forms and the

prescribed information to the applicant

2. where the applicant is insufﬁciently familiar with the English language – the person has interpreted the relevant

information to the applicant in a language with which the applicant and this other person are both familiar

3. where the applicant is unable to sign due to a physical incapacity – the person believes that the applicant has read

and understood the forms and prescribed information.

The person assisting must state the reason/s why the applicant required assistance and must sign in the panel provided on

the debtors petition form and the panel provided at the end of the statement of affairs form.

Applications by mentally incapacitated persons

Where a guardian or administrator is appointed under relevant state/territory legislation to manage the ﬁnancial affairs

of mentally incapacitated persons, the appointed guardian or administrator must obtain a speciﬁc order from the relevant

court/tribunal authorising the application on behalf of the mentally incapacitated applicant.

A speciﬁc order from the relevant court/tribunal is not required for presentation of the application by a guardian/

administrator for appointments under the Protected Estates Act 1983 (NSW) and the Guardianship and Administration Act

1990 (WA) as the legislation itself provides sufﬁcient authority to the guardian/administrator of the applicant.

Note: An application may not be presented on behalf of a mentally incapacitated debtor by the holder of a power of

attorney granted by that debtor.

Page 2 of 2

6(DP)(P

page 1 of 

www.afsa.gov.au - 1300 364 785

DEBTOR’S PETITION

(APPLICATION TO BECOME BANKRUPT)

Bankruptcy Act 1966 Section 55(2)

The information you are required to provide on this form is collected under, and for the purposes of, the

Bankruptcy Act 1966 or related legislation. The Australian Financial Security Authority has a privacy policy at

www.afsa.gov.au/privacy that provides information regarding the collection, storage, use and disclosure of

personal information, including how you may: (i) access your personal information; (ii) seek to have that

information corrected; and (iii) complain if you feel your privacy has been breached, along with information on

how your complaint will be dealt with.

Privacy

Contact Details

Title Given name/s (include all names) Surname

Other names used by you in the past 10 years

Title Given name/s (include all names) Surname

Contact number (include area code) Work number (include area code) Mobile number

Email address

Address Postcode

Current occupation Date of birth (DD/MM/YYYY)

To be eligible to present this petition you must have a relevant Australian connection. Select the statement that

describes your connection to Australia.

I am personally present in Australia or ordinarily resident in Australia

I have a dwellinghouse or place of business in Australia

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page 2 of www.afsa.gov.au - 1300 364 7856(DP)(P)

I am presenting this debtor’s petition to become bankrupt (select one of the following):

as an individual debtor

against a business partnership of which I am a partner (petitions from either all or a majority of the partners need

to be submitted together with your petition)

jointly with another person and we are not in a business partnership (petition from the other person needs to be

submitted together with your petition)

Proof of Identity

Note: your petition will not be accepted if you do not provide appropriate proof of identity details below. While

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$7

\SHRILGHQWL¿FDWLRQ %1DPHRQGRFXPHQWOLFHQFH C. Document/licence number

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page 1, please explain why.

Declaration of Person Zho Assisted Zith the Completion of Forms

I declare that, before this form was completed, I carefully read to/interpreted for the person named in the Contact

Details section the prescribed information and the questions on this form or [where the person is physically

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provided in this form are those of the person named above.

Reason the debtor required your assistance

Full name and address of the assisting person

Signature of the assisting person Date (DD/MM/YYYY)

page  of www.afsa.gov.au - 1300 364 7856(DP)(P)

DEBTORS PETITION PRESCRIBED INFORMATION

You must read the following information before signing the declaration.

Your Options to Deal Zith Unmanageable Debt

Talk to your creditors: some creditors could give you more time to pay, agree to renegotiate repayments or accept a smaller payment

to settle the debt. Some creditors have hardship provisions which you can use to vary the terms of your contract. You should call your

creditors and ask about their hardship provisions.

Lodge a declaration of intention to present a debtor’s petition: this stops your creditors, the bailiff or sheriff taking action to recover

unsecured debts for a period of 21 days. You could use that time to speak to your creditors, consider other options or seek advice.

Propose and enter a debt agreement (DA): a debt agreement is a legally binding arrangement between you and your creditors which

must be accepted by the majority of your creditors. The agreement is administered by a debt agreement administrator who will charge

a fee. Your debts, assets and income must be under certain limits* to propose a DA. You can offer to pay your creditors by instalments

or in a lump sum which may be less than the full amount of your debts. You will be released from debts covered by the agreement once

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commercial credit record for 5 years, or longer in some circumstances. See the paragraph ‘Your ability to obtain credit and certain

services may be affected’ at the bottom of this page for additional information and obligations.

Propose and enter a personal insolvency agreement (PIA): a PIA is also a legally binding arrangement between you and your

creditors which must be accepted by a majority of your creditors. The PIA must be administered by a trustee who will charge a fee. There

are no debt, asset or income limits. You can offer to pay your creditors by instalments or in a lump sum which may be less than the full

amount of your debts. You will be released from debts covered by the agreement once you have completed all obligations and payments

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some circumstances.

Sources of further information: \RXFDQDVNIRUKHOSIURPD¿QDQFLDOFRXQVHOOLQJVHUYLFHUHJLVWHUHGWUXVWHHUHJLVWHUHGGHEWDJUHHPHQW

administrator, lawyer or an accountant. They will talk to you about your options and may speak to creditors on your behalf.

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visiting www.afsa.gov.au.

Consequences of Proceeding Zith a Petition Ior Bankruptcy

A trustee will administer your bankruptcy: you may ask a registered trustee to administer your bankruptcy. If you do not choose a

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creditors can change your trustee. You must assist your trustee at all times. You must immediately notify your trustee in writing of any

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they recover.

Your assets may be sold: you will be able to keep ordinary household goods, tools (up to a certain value)* used to earn an income and

vehicles (up to a certain value)* but other assets - including your house - can be sold by your trustee. You cannot conceal, remove or

dispose of any property inside or outside Australia. If you do, you may be subject to criminal prosecution.

Your income, employment and business may be affected: if your income exceeds a set limit*, you may be required to make

contributions from your income. You cannot be a director of and/or manage a company. Some professional/licensing bodies may restrict

or prevent you from continuing in that trade or profession. You may not be able to hold certain public positions. If you are in business and

trade under a business name different to your own, you must tell everyone you deal with that you are bankrupt. If you don’t, you may be

subject to criminal prosecution.

You may not be released from all debts: you are released from most of your unsecured debts (eg credit cards, personal loans, store

cards) once you are discharged from bankruptcy. Some types of debts are not covered by bankruptcy (eg debts incurred by fraud,

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on a house or a car) and you do not maintain repayments, that creditor can repossess and sell the asset; however the shortfall, if any,

will be covered by bankruptcy.

Your ability to travel overseas will be affected: you will not be able to travel overseas without the written permission of your trustee

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required to pay an overseas travel application fee.

Your name will be on the public register (NPII) forever: it will also be recorded on a commercial credit record for 5 years, or

longer in some circumstances.

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provider that you are bankrupt. If you enter into a hire purchase agreement or a contract for the hiring or leasing of any goods whereby

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by promising to supply goods or render services, you must tell the purchaser that you are bankrupt. If you don’t disclose your bankruptcy

in these circumstances, you may be liable to criminal prosecution.

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I Acknowledge What I Kave Received and Read the Prescribed Information

Your signature Date (DD/MM/YYYY)

3(SOA)(P)032014

page 1 of 25

www.afsa.gov.au - 1300 364 785

Ofce Use Only

Document received (DD/MM/YYYY)

STATEMENT OF AFFAIRS

Bankruptcy Act 1966

Form last approved by Inspector-General 1/12/10.

Privacy

The information you are required to provide on this form is collected under, and for the purposes of, the

Bankruptcy Act 1966 or related legislation. The Australian Financial Security Authority has a privacy policy

at www.afsa.gov.au/privacy that provides information regarding the collection, storage, use and disclosure

of personal information, including how you may: (i) access your personal information; (ii) seek to have that

information corrected; and (iii) complain if you feel your privacy has been breached, along with information

on how your complaint will be dealt with.

Your Name

Print name in full

Title Given name/s Surname

If you do not speak, read or write English, the Interpreting Service is available for the cost of a local call on 131 450.

Contents of the Statement of Affairs Page

PART A – PERSONAL DETAILS - CONFIDENTIAL 3

PART B – PERSONAL DETAILS - PUBLIC 11

PART C – YOUR ASSETS - PUBLIC 12

PART D – YOUR LIABILITIES - PUBLIC 17

PART E – BUSINESS DETAILS - PUBLIC 19

DECLARATION 24

CHECKLIST FOR STATEMENT OF AFFAIRS 25

Ofce Use Only

Date led Event number Administration number

page 2 of 25www.afsa.gov.au - 1300 364 7853(SOA)(P)032014

ADDITIONAL NOTES

page 3 of 25www.afsa.gov.au - 1300 364 7853(SOA)(P)032014

PART A – PERSONAL DETAILS - CONFIDENTIAL

1 Your Personal Details

Home telephone number Work telephone number Mobile number Fax number

Email address

Do you prefer to receive correspondence by email where possible?

No Yes

Name and address of a contact person who does not live with you

Title Given name/s Surname

Address Postcode

Telephone number Relationship

Do you have any passports? No Yes

If yes, how many? please give details

Passport 1

Passport number Expiry date Country of issue

Passport 2

Passport number Expiry date Country of issue

Do you have a current driver’s licence? No Yes

please give details

Licence number Expiry date State of issue in Australia Other

Are you of Aboriginal or Torres Strait Islander origin? (optional) No Yes

Were you born overseas? (optional) No Yes

please give details

Which country? (optional)

What languages do you speak at home? (optional)

2 Accountant

Do you have an accountant? No Yes

please give details

Firm name Contact person Phone number

Address Postcode

page 4 of 25www.afsa.gov.au - 1300 364 7853(SOA)(P)032014

PART A – PERSONAL DETAILS - CONFIDENTIAL

3 Solicitor

Do you have a solicitor? No Yes

please give details

Firm name Contact person Phone number

Address Postcode

4 About your family

Do you have a spouse/partner? No Yes

please give details

Your spouse/partner’s full name

Do you live with your spouse/partner?

No Yes

What is your spouse/partner’s separate gross income ($) per year, OR per week

Do you have any dependants residing with you?

(eg spouse, children, parents, invalid relative)

No Yes please give details

Full name Relationship Date of birth Separate income ($)

5 Child Support

In the next 12 months, do you expect to pay or receive any

nancial support under the Child Support (Assessment) Act

or the Family Law Act 1975?

No Yes

Please give details and provide a

copy of the assessment or order

Paid to/received from Amount ($) Frequency

I pay child support/maintenance

I receive child support/maintenance

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PART A – PERSONAL DETAILS - CONFIDENTIAL

6 Family Law Financial Proceedings

Have you been a party to a family law property

or spousal maintenance order or agreement?

No Yes

Please provide a copy of the agreement or

order

Date of the order

Are you currently involved in any family law

property or spousal maintenance proceedings?

No Yes

Please provide a copy of the application. Do

not include proceedings for custody of children

Are you likely to become involved in any

such proceedings?

No Yes

7 Legal Actions

Are you involved in any legal processes or disputes?

No Yes

Provide a copy of the summons, writ or

other legal documents and letters

Plaintiff Defendant Court Plaint no.

8 Proceeds of Crime Orders

Are you or your property subject to a proceeds of crime

order or an application for a proceeds of crime order?

No Yes Provide a copy of the order

9 Summary of your Income in the last 12 months

Provide details of your income (before tax) over the past 12 months.

Type of income Details $

Government benets/pensions

Payment type:

Income from self employment

Business name:

Income from business

Business name:

Gross wages & salary before tax

Employer name:

Superannuation retirement funds

Fund name:

Lump sum termination payments

Received from:

Deceased estate or trusts

Received from:

Income from investments

(eg dividends, interest, trusts)

Received from:

Income from reverse mortgages

Received from:

Any other source

Received from:

Total

You must provide evidence of your income (eg payslips, tax returns, statements)

page 6 of 25www.afsa.gov.au - 1300 364 7853(SOA)(P)032014

PART A – PERSONAL DETAILS - CONFIDENTIAL

10 Summary of your Expected Income in the next 12 months

Provide details of your income (before tax) that you expect to receive in the next 12 months.

If you are not sure, please estimate.

Type of income Details $

Government benets/pensions

Payment type:

Income from self employment

Business name:

Income from business

Business name:

Gross wages & salary before tax

Employer name:

Superannuation retirement funds

Fund name:

Lump sum termination payments

Received from:

Deceased estate or trusts

Received from:

Income from investments

(eg dividends, interest, trusts)

Received from:

Income from reverse mortgages

Received from:

Any other source

Received from:

Total

You must provide evidence of your income to your trustee (eg payslips, tax returns, statements) on the anniversary

of your bankruptcy and when your income changes

11 Employment Status

Are you currently employed?

No Yes Go to Q12

How long have you been unemployed? Years Months

What was your occupation when you

were last employed?

Go to Q15

page 7 of 25www.afsa.gov.au - 1300 364 7853(SOA)(P)032014

PART A – PERSONAL DETAILS - CONFIDENTIAL

12 Current Employment

Employer details Job 1 Job 2

Name

Address

Employed as

Type of industry

Pay period (week/fortnight/month)

How many hours do you work per

week?

Is your employer a related entity?

No Yes No Yes

If you are unsure whether your employer is related, please refer to the instructions in the front of this booklet before

answering this question.

Employment Income Job 1 ($) Job 2 ($)

Income

Gross pay per pay period

(before tax) (A)

Deductions

Income tax

Garnishees by creditors

Superannuation

Maintenance/child support

Other

Total Deductions

(B)

What is your net pay? ($)

(A)–(B)

Provide your payslip

13 Private Health Insurance

Do you have private patient hospital cover?

No Yes

14 Salary Sacrice

Is your salary now or at any time in the last 2 years subject to a

salary sacrice arrangement? (that is, you have given up cash

wages for another type of non-cash benet)

No Yes please give details

page 8 of 25www.afsa.gov.au - 1300 364 7853(SOA)(P)032014

PART A – PERSONAL DETAILS - CONFIDENTIAL

15 Superannuation Benets

Does any party make a superannuation contribution for you? No Yes please give details

Name and address of the

person making the payment

Where is it paid to? How much is paid? ($ per week)

16 Other Benets

Do you, or any member of your family, receive or expect to receive

any benet from any other person or entity? (include rent, low

interest loans, payment of your expenses or children’s education)

No Yes please give details

Type of benet 1 2

Name of person giving benet

Name of person receiving benet

Value of benet per year ($)

Your contribution per year ($)

17 Motor Vehicle Benets

Do you use a vehicle which is owned by someone else? No Yes please give details

Owner’s name and address

Relationship (eg employer/spouse) When did the owner purchase the vehicle?

Make of vehicle Model of vehicle Year of manufacture

How much do you contribute for the

use of the vehicle? ($)

How many days per week

do you have the vehicle?

How many kilometres do you travel per

week?

page 9 of 25www.afsa.gov.au - 1300 364 7853(SOA)(P)032014

PART A – PERSONAL DETAILS - CONFIDENTIAL

18 About Your Insolvency

What do you believe is the main cause of your insolvency?

Tick one cause only in either 18A or 18B that best describes the main cause of your nancial difculties.

18A Non business related

Unemployment or loss of income

Adverse legal action

Liabilities due to guarantees

Gambling, speculation & extravagance in living

Ill health or absence of health insurance

Domestic discord or relationship breakdowns

Excessive use of credit facilities including losses on repossessions, high interest payments and

pressure selling

18B Business related (only applies if you have personally operated a business)

Economic conditions affecting industry, including competition, credit restrictions, fall in prices or

increases in costs

Lack of business ability including underquoting or failure to assess potential of business

Excessive interest payments on loan monies and capital losses on repayments

Excessive drawings including failure to provide for taxation

Inability to collect debts due to disputes, faulty work or bad debts

Failure to keep proper books of account and costing records

Lack of sufcient initial working capital

Gambling or speculation

Seasonal conditions including oods and drought

If other reason not listed, please specify:

18C When did you rst have difculty paying your debts? (month/year)

18D Where did you obtain information about bankruptcy and the alternatives? (tick one only)

AFSA Financial Counsellor Accountant

AFSA pamphlets Registered Trustee Solicitor

AFSA website Debt agreement consultant/

administrator

Other

18E Have you previously presented a declaration of intention to present

a debtor’s petition, proposed or entered into a debt agreement or a

personal insolvency agreement or become bankrupt? No Yes please give details

Type of proceeding Administration number Year

Bankruptcy

Part IX debt agreement

Part X personal insolvency agreement

Declaration of Intention to present a debtor’s petition

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PART A – PERSONAL DETAILS - CONFIDENTIAL

BLANK PAGE

page 11 of 25www.afsa.gov.au - 1300 364 7853(SOA)(P)032014

PART B – PERSONAL DETAILS - PUBLIC

Any information provided from this point on is available to the public

PART B – PERSONAL DETAILS - PUBLIC

19 About You

Gender

Male Female

Date of birth

Title

Mr Mrs Ms Miss Other

Family name Given names

List all other names you have used in the last 10 years

Residential address Postcode

Do you own or are you buying this property?

No Yes

please give details at Q28

If no to the question above, are you renting this property?

No Yes

Previous two residential addresses. Address 1

Postcode

Did you own or were you buying this property? No Yes Date sold

Address 2

Postcode

Did you own or were you buying this property? No Yes Date sold

20 Occupation

What is your usual trade or profession?

21 Business

In the past 5 years have you operated a business as a

sole trader, via a partnership, via a company or a trust?

No Yes Provide details in Part E

Postal address

Postcode

page 12 of 25www.afsa.gov.au - 1300 364 7853(SOA)(P)032014

PART C – YOUR ASSETS - PUBLIC

22 Cash

How much cash do you have? (include cash at bank at Q23) $

23 Banks / Building Societies / Credit Unions/ Other Financial Institutions

List all accounts held (include joint and overdrawn accounts) with any of the above types of institutions within the

last 12 months. (Note: presently overdrawn accounts should also be included as creditors at Q40)

Full name of bank/other

nancial institution

Branch name Account number and

account type

Current balance ($) Joint account

No Yes

24 Tax Refund

Do you expect to receive a tax refund?

No Yes

please give details

Year ended Amount expected ($)

30 June

25 Tools of Trade

Do you have tools of trade?

No Yes

please give details

What is their estimated resale value? ($)

26 Superannuation and Life Insurance Policies

List all superannuation funds and life insurance policies

Name of fund Is this a regulated fund? Balance of fund ($) Type of fund

No Yes Super Life

Have you received a superannuation payout from any fund in the last

5 years?

No Yes

please give details

Date received Amount received ($)

Have you made a lump sum payment to any superannuation fund in

the last 5 years?

No Yes

please give details

Date paid Amount paid ($)

Do you expect to receive payment from any superannuation fund in

the next 3 years?

No Yes

page 13 of 25www.afsa.gov.au - 1300 364 7853(SOA)(P)032014

PART C – YOUR ASSETS - PUBLIC

27 Vehicles

Do you own, or have an interest in any vehicles?

(this includes cars, motor bikes, trailers, caravans, campervans, boats)

No Yes please give details

Type of vehicle

(eg car, boat)

Make Model Year Registration

number

Estimated resale

value ($)

Amount owed

(if any) ($)

Please copy this page if you own more than one property.

28 Real Estate

Do you own, or are you buying, any land or buildings in Australia or overseas?

(This includes any interest in vacant land, house, unit, commercial property)

No - Go to Q 29

Yes - please give details

Is there a building on the land? No Yes please give details

Type eg house/unit

Age of building in

years

Number of

bedrooms

Number of

bathrooms

What is the property address?

Date the property was acquired or purchased Amount paid to acquire or purchase the property ($)

What is the estimated resale value of the property?

($)

How much do you owe to creditors who hold security over

this property? ($)

Are there any other owners?

No Yes please give details

Owner 1 Owner 2

Name

Address

Is the property vacant?

No Yes

Do you live at the property?

No Yes

Does your partner live at the property?

No Yes

Is the property rented to tenants? No Yes please give details

Gross rent per week ($) Name of person collecting rent

Address

page 14 of 25www.afsa.gov.au - 1300 364 7853(SOA)(P)032014

PART C – YOUR ASSETS - PUBLIC

Is the property listed for sale? No Yes please give details

Agent’s name

Address

Is the property insured?

No Yes

Expiry date

29 Shares

Do you own, or are you entitled to any shares, options, rights, convertible

notes or other securities?

No Yes please give details

Name and address of company Number of

Shareholder number Date acquired Market value

($)

See note

below

Note: Do any of the above shares have any restrictions on their sale? (Eg certain types of employee shares cannot

be sold for a specied period). If there are any sale restrictions, please write ‘R’ in the last column above.

30 Investments

Do you have any managed investments, insurance bonds, debentures or

other investments?

No Yes please give details

Investment type Date acquired Market value ($)

31 Money Owed to You

Do you have any debts owed to you? (include loans to friends and

relatives and to family trusts or private companies; do not include child

support arrears)

No Yes please give details

Name and address of person or

organisation who owes you money

Date debt was created Amount owed ($) Amount likely to be

received ($)

page 15 of 25www.afsa.gov.au - 1300 364 7853(SOA)(P)032014

PART C – YOUR ASSETS - PUBLIC

32 Deceased Estate

Do you have an interest in a deceased estate? Provide a copy of the will or

letters from the executor

No Yes please give details

Name of deceased Date of death Executor name and address Estimated value of

benet ($)

33 Sale, Transfer or Gift of Assets in the last 5 years

Have you sold, transferred or given away any assets worth more than $1000

in the last 5 years? Provide a copy of the receipt or settlement statement

No Yes please give details

What did you sell,

transfer or give away?

To whom was it sold,

transferred or gifted?

Date transferred What was it

worth?

How much

was it sold

for? ($)

How much did

you receive

net? ($)

34 Assets you own which are in somebody else’s possession

Do you own any assets which are not currently in your possession?

No Yes please give details

Description of asset Who has the asset? Name and address What is it worth? ($)

35 Assets you contributed towards or helped purchase

Have you contributed or otherwise assisted in the purchase or improvement

of any asset valued over $1000 which is held by someone else?

No Yes please give details

Description of asset Name and address of person who has the asset What is it worth? ($)

page 16 of 25www.afsa.gov.au - 1300 364 7853(SOA)(P)032014

PART C – YOUR ASSETS - PUBLIC

36 Assets/Money Paid to Creditors

As a result of pressure for payment from creditors have you, in the last

12 months, paid a total amount of more than $1000 over and above your

normal repayments or surrendered any assets to a creditor?

No Yes please give details

Date paid/surrendered Type of asset (eg cash/house) Value of asset ($) Name of creditor

37 Other Items of Value

Other than your general household furniture, do you own any other assets

or items of value? (eg jewellery, camera, artworks, antiques, copyrights)

No Yes please give details

Description of asset Location of asset Estimated

resale value ($)

Jointly owned

No Yes

Please attach a list if you have more assets

page 17 of 25www.afsa.gov.au - 1300 364 7853(SOA)(P)032014

PART D – YOUR LIABILITIES - PUBLIC

38 Secured Creditors

List your secured creditors. (Creditors who are not secured should be listed at Q40)

A secured creditor is a creditor who can repossess and sell your asset/s if you fall behind with your payments. For

example, a mortgage over your house, a hire purchase/lease agreement over your vehicle, a chattel mortgage or a

bill of sale over your business assets.

Secured creditor no. 1 Secured creditor no. 2 Secured creditor no. 3

Creditor’s name

Creditor’s postal address

Account/loan number

Total amount owing to this

creditor ($)

Type of security (eg

mortgage)

Date the security was given

Description of secured

asset

Location of asset

Estimated resale value of

the asset ($)

Is it a joint loan?

No Yes No Yes No Yes

Are repayments up to

date?

No Yes No Yes No Yes

Has the creditor

repossessed the asset?

No Yes No Yes No Yes

Related creditor

No Yes No Yes No Yes

Related creditors - If you are unsure whether a creditor is related, please refer to the information sheet

accompanying this form before answering this question. Related creditors must be disclosed by selecting Yes or No.

39 Equity Loan

Have you used any equity or made any additional loan withdrawals against

any of the above secured property in the last 12 months?

No Yes please give details

Date Amount withdrawn ($)

page 18 of 25www.afsa.gov.au - 1300 364 7853(SOA)(P)032014

PART D – YOUR LIABILITIES - PUBLIC

Please copy this page if you have more than 10 unsecured creditors.

40 Unsecured Creditors

An unsecured creditor is a creditor who does not hold security over any particular asset you own. They can include

credit cards, unpaid bills, loans from friends and relatives, personal guarantees and contingent debts. List all debts

that have not already been listed as secured at Q38.

Related creditors If you are unsure whether a creditor is related, please refer to the instructions for completing these

forms in the front of this booklet before answering this question. Related creditors must be disclosed by ticking the yes

or no box.

Joint debts: if the debt is owed jointly with another person you must disclose this by indicating Yes or No

Tax debts: if you owe a debt to the Australian Taxation Ofce, when listing this debt below please do not enter your tax

le number (TFN) in the account number column.

Creditor name

and address

Nature of

debt

Account

number

Mth/Yr

incurred

Total amount

owing ($)

Related party? Joint debt?

No Yes No Yes

Total

Note: certain creditors can continue recovery action during bankruptcy and you may not be released from debts such

as child support, maintenance and debts incurred by fraud.

page 19 of 25www.afsa.gov.au - 1300 364 7853(SOA)(P)032014

PART E – BUSINESS DETAILS - PUBLIC

41 Sole Trader/Partnership

Have you been in business as a sole trader or

in partnership at any time in the last 5 years?

No Go to Q43 Yes please give details

If you have operated more than one business please copy this section, complete and attach.

Business name Business address

41A Is the business registered with the Australian Taxation Ofce for GST payments? No Yes

41B Is the GST registration on a cash or accrual basis? Cash Accrual

41C Do you have an Australian Business Number? No Yes Number

What is the nature of this business?

Partner’s name and address (if any)?

Second partner’s name and address (if any)?

41D Is there a written partnership agreement? No Yes attach copy

41E When did the business start operating? Date

41F Has the business ceased operating? No Yes Date ceased

41G

Have you sold any business assets or have you sold the business as

a going concern in the past 2 years? No Yes

please give

details

Business name/asset description Date sold Name of purchaser Amt received ($)

41H Are there any other business assets not sold?

No Yes please give details

Type of asset Resale value ($) Location of assets

Stock

Plant and equipment

Fixtures and ttings

Licences

Bank accounts

Book debts

Other (please describe) below

41I

Did your business cease operating more than

6 months ago?

No - you must answer Q42

before moving on to Q43

Yes - go to Q43

page 20 of 25www.afsa.gov.au - 1300 364 7853(SOA)(P)032014

PART E – BUSINESS DETAILS - PUBLIC

42 Sole Trader/Partnership – Operating or Ceased in past 6 months

42A Is any stock on consignment or subject to retention of title?

No Yes

42B Is there a bill of sale or other security over business assets? No Yes attach copy of the bill of sale

42C Do you have a lease agreement over your business premises? No Yes please give details

Landlord name

Landlord address

Period of lease

42D Have you sold or tried to sell the business? No Yes please give details

Agent name

Agent address

Asking price ($)

42E Who has your business records?

Name Telephone number

Address

42F Who prepares the nancial statements and tax returns?

Name Telephone number

Address

Attach copies of the last available nancial statements

page 21 of 25www.afsa.gov.au - 1300 364 7853(SOA)(P)032014

PART E – BUSINESS DETAILS - PUBLIC

43 Companies

43A Have you been a director or had a management role

in a company at any time in the last 5 years?

No - Go to Q 44 Yes - please give details

If you have operated more than one company please copy this section, complete and attach.

Company name

ABN

Registered address

Trading name

Nature of company activity

Is this a trustee company? If yes, what is the name of the trust?

Ofceholder positions held by you in the last 2 years

Director Date resigned

Secretary Date resigned

43B Has a liquidator, receiver or administrator been appointed to manage

the company? No Yes please give details

Name

Address

43C Is a dividend or distribution expected? No Yes please give details

43D Does the company owe you any wages, loans or any other money? No Yes please give details

Description Amount owed ($)

43E Do you own, or have you at any time during the last

5 years owned any shares in this company? No Yes please give details

No. of shares Date sold Transferee name and address Sale proceeds ($)

page 22 of 25www.afsa.gov.au - 1300 364 7853(SOA)(P)032014

PART E – BUSINESS DETAILS - PUBLIC

43F Have you transferred any assets to the company in the

last 5 years? No Yes please give details

Description of asset

Date of transfer Value of asset ($) Money you received ($)

43G Who prepares the nancial statements and tax returns?

Name Telephone number

Address

Attach a copy of the last available nancial statements

44 Trusts

44A Have you been a unit holder in or beneciary of a trust in the last 5 years; OR

44B Have you transferred any assets to a trust in the last 5 years?

No Yes please give details

If you have been involved in more than one trust please copy this section, complete and attach.

Trust name

Principal activity Type of trust

Unit Discretionary Other

Trustee name

Trustee address

44C Are there any assets owned by the trust? No Yes please give details

Asset description Resale value ($)

44D Does the trust owe you any wages, loans or other money? No Yes please give details

Description Amount owed ($)

page 23 of 25www.afsa.gov.au - 1300 364 7853(SOA)(P)032014

PART E – BUSINESS DETAILS - PUBLIC

44E Have you received any income or capital distribution from

this trust in the last 2 years? No Yes please give details

How often do you receive a distribution Date of last payment Amount of last payment ($)

44F Have you transferred any assets to the trust in the last 5 years? No Yes please give details

Description of asset Date of

transfer

Value of asset

($)

Money you received

($)

44G Name and address of the person holding the trust deed, books of account and nancial statements.

Name Telephone number

Address

Email address

Attach a copy of the last available nancial statements

page 24 of 25www.afsa.gov.au - 1300 364 7853(SOA)(P)032014

DECLARATION

Note: S267(2) of the Bankruptcy Act provides that a person must not make a declaration that the person knows to be

false. Penalty: Imprisonment for 12 months.

I declare that the particulars set out in this statement are correct.

Signature Date (DD/MM/YYYY)

If you received assistance completing this form, the person providing the assistance should sign the statement below.

I declare that before this form was completed, I carefully read to/interpreted for the person named above the

prescribed informatio and the questions on this form or [where the person is physically incapacitated] satised myself

that the person had read and understood the information and questions. The responses provided in this form are

those of the person named above.

Reason the debtor required your assistance

Full name and address of the person assisting

Signature of the person assisting Date (DD/MM/YYYY)

page 25 of 25www.afsa.gov.au - 1300 364 7853(SOA)(P)032014

CHECKLIST FOR STATEMENT OF AFFAIRS

• Have you answered every question in Parts A, B, C, D and E. Part E must be completed if you have been

involved in a business/ company/ trust in the last 5 years.

• Have you attached all documentation you have been asked to provide.

Document checklist

Question Document required

5 Child support Child Support Agreement/Assessment Notice

6 Family law nancial proceedings Family law or spousal maintenance order or application

7 Legal actions Summons, writ or other documents

8 Proceeds of crime Court order or application

9 Income Payslip/Tax Assessment Notice/Centrelink Statement of Benet *

32 Deceased estate Copy of the will

33 Sale, transfer or gift of assets Property settlement statement

41D Sole trader/partnership Partnership Agreement

42B Security over business assets Bill of sale or other security document/agreement

42F Sole trader/partnership Last available nancial statements

43G Companies Last available nancial statements

44G Trusts Last available nancial statements

* Documents in support of income: please ensure that any document you attach in support of your income does

not display your tax le number (TFN). Where you are attaching your Tax Assessment Notice or any other

document that contains your TFN, please ensure that TFN data is erased or ‘blacked out’

so that the TFN is

not visible.

Supporting better outcomes for consumers, business and the community.

www.afsa.gov.au

Page 1 of 30

Personal insolvency information

for debtors

This publication is designed for people who may be nding their level of debt unmanageable and are contemplating

bankruptcy or any of the formal options available under the Bankruptcy Act.

All the information contained in this publication and the required forms can also be found on AFSA’s website

www.afsa.gov.au.

All of the formal options to deal with unmanageable debt (eg bankruptcy) outlined in this publication have serious

consequences. It is recommended that you investigate all options available to you, including negotiating directly with your

creditors, prior to entering any formal arrangement such as bankruptcy.

Privacy: If you choose to enter into a personal insolvency arrangement, you will need to complete forms that require the

provision of “personal information” (as dened by the Privacy Act 1988). This information is collected under, and for the

purpose of, the Bankruptcy Act 1966 or related legislation.

September 2

017

Contents

Your options for dealing with unmanageable debt 2

Informal options

- Formal options 2

Formal options to deal with unmanageable debt

- Suspension of creditor enforcement by presenting a

declaration of intention (DOI) to present a debtor’s petition option 3

- Debt agreement 4

- Personal insolvency agreement 6

- Bankruptcy 8

Essential bankruptcy information

- Part A: Assets 11

- Part B: Your employment and income 12

- Part C: Debts and creditors 14

- Part D: Overseas travel 15

- Part E: When your bankruptcy ends 16

- Part F: Annulment 17

- Part G: Fees and Charges 18

Fees and charges

Quick comparison of features between dierent types of personal insolvency administrations

Notes

Glossary

P(PersInsolvInfoForDebt)

2017

Page 2 of 30

Your options for dealing with

unmanageable debt

Being unable to manage your debts can be caused by various reasons, some of which may be beyond your control.

For instance, sudden unemployment, ill health or breakdowns in family relationships are often the causes that trigger

nancial hardship.

It is important to recognise nancial diculty early so that you can address the situation before it becomes

unmanageable. If you are having trouble managing your debts there are actions you can consider before turning to the

formal arrangements oered by the Bankruptcy Act.

Getting help

Financial counsellors help people in nancial diculty, and are available in every state and territory. Their services are

free, independent and condential. You can talk to a nancial counsellor from anywhere in Australia by phoning

1800 007 007 (minimum opening hours are 9.30 am – 4.30 pm Monday to Friday). This number will automatically direct

your call through to a nancial counselling service in the state or territory closest to you.

Contact information for registered trustees and debt agreement administrators is also available on our website

(www.afsa.gov.au) or by contacting us on 1300 364 785.

Need help with interpreting?

If you want to talk to AFSA but do not speak English, call the Translating and Interpreting Service on 131 450.

Informal options

You should read “Dealing with debt: Your rights and responsibilities”. This is a government publication which gives you

information on dealing with debts, debt collectors and disputes. This publication is available through the Australian

Securities and Investments Commission (ASIC) www.asic.gov.au or phone 1300 300 630 or the Australian Competition

and Consumer Commission (ACCC) www.accc.gov.au or phone 1300 302 502.

One way of dealing with unmanageable debt is to approach your creditors (the people you owe money to). In some

circumstances, creditors may give you more time to pay, agree to renegotiate repayments or accept a smaller payment

to settle the debt. You can contact your creditors directly or you can ask for help from a nancial counselling service, a

community legal centre, a registered trustee, a registered debt agreement administrator, a lawyer or an accountant. They

will talk to you about your options and may speak to creditors on your behalf, help with budgeting advice or give you

advice about other sources of government assistance.

Formal options

The Bankruptcy Act provides four formal options to deal with unmanageable debt. The legislation sets out what you and

your creditors can and cannot do under each of these arrangements. More detail regarding each formal option can be

found in this booklet at “Formal options to deal with unmanageable debt” from page 3.

Note: The consequences of entering into a formal arrangement are serious. All formal arrangements will affect

your credit rating. It is your responsibility to read and understand the information contained in this publication

before you decide to enter one of these arrangements.

Choosing the right option

Every person’s circumstances are dierent. An option that suits one person may not suit another. In making your

decision, it is important to be realistic about your current situation as well as what you expect to happen in the future.

For instance, if you are thinking about asking your creditors for more time to pay your debts, or to pay by instalments,

then you should make sure that this is something you will denitely be able to aord. If not, you may want to think about

other more formal options.

The following pages provide more detailed information about the formal options that may be available to you. A

comparison of the various options is also provided on page 21. If you have any questions regarding any of these

options, please call us on 1300 364 785 or visit our website at www.afsa.gov.au.

AFSA does not provide advice about which option is best suited to your particular circumstances. You are encouraged to

seek independent advice before making a decision. Refer to the '

Getting help' section on this page for how to contact a

nancial counsellor in your area for help and advice.

Page 3 of 30

Formal options to deal with

unmanageable debt

Suspension of creditor enforcement by presenting a declaration of

intention (DOI) to present a debtor’s petition option

If you have unmanageable debt and need time to consider your options, you may apply for temporary protection from

enforcement action by your unsecured creditors by lodging a DOI.

This temporary relief allows you to negotiate payment arrangements with creditors or, alternatively, consider a formal

insolvency administration (debt agreement, personal insolvency agreement or bankruptcy) that may be suited to your

circumstances.

What is a DOI?

A DOI is an option under the Bankruptcy Act that provides temporary relief to allow you up to 21 days to decide whether

to proceed with bankruptcy or another option. During the 21-day period, unsecured creditors cannot take any action

to recover debts, including recovering money or seizing unsecured assets. In this time you can consider your nancial

circumstances, negotiate with your creditors and, where possible, make suitable arrangements to avoid entering a formal

option under the Bankruptcy Act.

What happens if I lodge a DOI?

A DOI is not recorded on the National Personal Insolvency Index (public electronic register of all personal insolvencies).

Your creditors are notied of the stay on enforcement action and provided with a copy of your nancial aairs. You do

not automatically become bankrupt after the 21 day stay period, however, if you have not come to a suitable arrangement

with your creditors and you do not voluntarily apply to become bankrupt, your creditors can choose to apply to the court

to make you bankrupt.

Who can lodge a DOI?

You may lodge a DOI if:

•

you have not applied for a DOI in the last 12 months

• you have not signed a controlling trustee authority within the preceding six months (ie proposed a personal

insolvency agreement to your creditors)

• you are not currently under a debt agreement, personal insolvency agreement or the subject of a current controlling

trustee authority

• a creditor has not already petitioned for you to be made bankrupt

• you have a residential or business connection to Australia (ie you are living in Australia or conduct business in

Australia).

What are the eects of a DOI?

Generally, your unsecured creditors cannot continue with any enforcement action for 21 days. Some unsecured creditors

are not bound by this stay period and they may continue recovery action (eg child support debts, court imposed nes/

penalties and HELP debts). Secured creditors are also not bound by this stay period (eg if your car or house mortgagee

has initiated repossession proceedings, they may continue to do so).

The 21-day period can end earlier if:

•

a creditor petitions the court to make you bankrupt and/or the court makes you bankrupt during this period

• you sign a controlling trustee authority (ie propose a personal insolvency agreement) during this period

• you voluntarily apply to become bankrupt during this period.

Fees and charges

There is no fee to submit a DOI application.

Further information can be obtained by:

•

contacting us on 1300 364 785

• visiting www.afsa.gov.au

• discussing your ﬁnancial affairs with a ﬁnancial counsellor.

Page 4 of 30

Debt agreement

A debt agreement is a binding agreement between you and your creditors where creditors agree to accept a sum of money

that you can aord. Your repayments are based on your capacity to pay having regard to your income and all of your

household expenses.

What is a debt agreement?

A debt agreement is a formal option to help you deal with unmanageable debt.

You will be released from your debts when

you complete all payments and obligations under the agreement. A debt agreement may provide for:

•

weekly or monthly payments from your income

• deferral of payments for an agreed period

• the sale of an asset to pay creditors

• a lump sum payment to be divided among creditors.

Who can propose a debt agreement?

You can lodge a debt agreement proposal if you:

•

are insolvent (this means you are unable to pay your debts as and when they fall due)

• have not been bankrupt, had a debt agreement or appointed a controlling trustee under the Bankruptcy Act in the

last 10 years

• have unsecured debts, assets and after-tax income for the next 12 months all less than set limits. Limits are

provided on the Indexed Amounts information in this pack, or can be found on our website www.afsa.gov.au.

What happens when you propose a debt agreement?

•

your name and other details appear on the National Personal Insolvency Index (NPII), a public record, for the

proposal and any debt agreement

• your ability to obtain further credit will be affected. Details of the debt agreement will also appear on a credit

reporting organisation’s records for up to ﬁve years - or longer in some circumstances

• during the voting period creditors cannot take debt recovery action or enforce action against you or your property;

and must suspend deductions by garnishee on your income.

What are the eects of entering a debt agreement?

•

all unsecured creditors are bound by the debt agreement and are paid in proportion to their debts

• you are released from most unsecured debts when you complete all your obligations and payments

• secured creditors may seize and sell any assets (eg a house) which you have offered as security for credit if you are

in default

• creditors cannot take any action against you or your property to collect their debts

• the agreement does not release another person from a debt jointly owed with you.

What is the procedure?

Stage 1: Information

You must read and sign the prescribed information page regarding the consequences of bankruptcy, debt

agreements and other alternatives. This is available from www.afsa.gov.au or phone 1300 364 785.

Stage 2: Appointing an administrator

If, after considering all your options, you decide that a debt agreement is the best option, you must decide if you

are going to appoint an administrator. Most administrators are registered debt agreement administrators, but non

registered administrators are also available. Contact details for debt agreement administrators can be obtained by

contacting AFSA on 1300 364 785.

The services provided by an administrator attract a fee. The administrator can initially help you by providing

information about all of your available options, working out a budget and talking to your creditors.

Once you have appointed an administrator, they will determine if you are insolvent and the extent of your

unmanageable debt. They will also help you to prepare a debt agreement proposal that takes into account what you

can aord to pay creditors and will assist with the completion of the correct forms.

You and/or your administrator will need to complete and lodge three forms with AFSA:

• A debt agreement proposal -

this outlines what your proposal is to your creditors.

• An explanatory statement - informs the creditors about your income, expenses, assets and debts, personal

circumstances, household expenses and the reasons behind your ﬁnancial difﬁculty.

• A statement of affairs - this outlines in detail your personal information and circumstances. The completed form is

not sent to creditors and is not a public document.

Page 5 of 30

Stage 3: Proposal is lodged with AFSA

The debt agreement proposal must be completed and lodged with AFSA within 14 days of being signed by the

debtor.

A certicate signed by the administrator must accompany all debt agreement proposals lodged by an administrator.

The certicate states that the administrator:

•

has given you the prescribed information about bankruptcy, debt agreements and other options

• believes you can afford to make the payments promised in your debt agreement proposal; and

• believes you have properly disclosed your affairs to creditors.

If you are self-administering you do not have to supply a certicate but must provide AFSA with a signed copy of the

prescribed information when lodging the proposal.

All of these forms, including the prescribed information, can be found on www.afsa.gov.au or can be provided to you

by calling our National Service Centre on 1300 364 785.

Stage 4: AFSA sends proposal to creditors to assess and vote on

When the forms are lodged with AFSA, a number of checks are conducted to ensure that the debt agreement

proposal satises the eligibility criteria. If the proposal is accepted by AFSA for processing, it is recorded on the

National Personal Insolvency Index (NPII).

Each creditor is sent a report (completed by AFSA), copies of the debt agreement proposal and explanatory

statement, a statement of claim and a voting form. Creditors are asked to vote on the proposal by returning the

statement of claim and voting form by a nominated date. Any questions by creditors are referred to the debt

agreement administrator, if applicable. Creditors may vote yes, no or may abstain and by lodging a completed voting

form, provide details of the claim for dividend purposes. The voting period is generally ve weeks.

Stage 5: AFSA checks and counts the votes

After the votes are due, AFSA will review the creditors’ votes. For a debt agreement proposal to be accepted, AFSA

must receive “yes” votes from a majority in value of the creditors who vote.

If the proposal is accepted by a majority in value of creditors who vote:

•

the proposal becomes a debt agreement

• AFSA updates the NPII to show that you have entered a debt agreement.

If the proposal is rejected by a majority of creditors in value who vote or if no creditors vote:

•

the voting outcome is recorded on the NPII

• creditors can commence or continue with action to recover their debts.

If the proposal is withdrawn by you or cancelled by AFSA:

•

AFSA updates the NPII with this result

• creditors can commence or continue with action to recover their debts in these cases.

Stage 6: If a debt agreement proposal is accepted

If the debt agreement proposal is accepted by creditors, you must comply with the agreement and ensure it is completed

by the completion date listed on the proposal. If you have problems making payments during the debt agreement, you

should talk to your administrator as soon as possible.

The debt agreement administrator is responsible for:

•

collecting payments from the debtor

• keeping creditors and debtors informed

• paying dividends to creditors

• telling AFSA when the debt agreement is completed.

Fees and charges

A fee* is payable to AFSA on lodgment of a debt agreement proposal. Debt agreement administrators and other advisors

may also charge a fee for providing information and preparing debt agreement forms.

Funds received by an administrator

are subject to a realisations charge* (a government levy) which is paid by the administrator directly to the government.

Any interest earned on funds realised by a registered debt agreementadministrator is payable to the government.

*For current information see ‘Fees and charges’ on page 19 or visit our website at www.afsa.gov.au

Page 6 of 30

Frequently asked questions

Can I change my debt agreement if my circumstances change?

You can request to change your debt agreement by lodging a variation

proposal if your circumstances have

changed.

A termination proposal may be lodged by you (as the debtor) or a creditor if the terms of the debt agreement

are not being carried out. Creditors vote on a proposal to vary or terminate in the same way as they vote on the

original proposal. If it is not accepted by creditors, the terms of the debt agreement remain in force. You (as the

debtor), a creditor or AFSA may apply to the court for an order to terminate a debt agreement.

The agreement is automatically terminated

if:

• you have not made any payments for six months after a payment is due or

• you do not complete the payments within six months of the completion date of the agreement.

The eects of terminating a debt agreement include:

•

creditors can commence or recommence recovery action against you

• the termination of the debt agreement is registered on the NPII

• creditors may apply for an order that you be made bankrupt.

When does a debt agreement end?

A debt agreement ends when:

• you have completed all your obligations and payments or

• the court orders the debt agreement be terminated or declared void or

• the debt agreement is terminated by creditors.

Further information can be obtained by:

•

talking to your debt agreement administrator

• contacting us on 1300 364 785

• seeking independent advice from an accountant or solicitor

• discussing your ﬁnancial affairs with a ﬁnancial counsellor.

Personal insolvency agreement

A personal insolvency agreement (PIA) is a formal option available to help you deal with unmanageable debt. A PIA is a

exible way for you to come to an arrangement with creditors to settle your debts without being bankrupt.

What is a PIA?

A PIA may involve one or more of the following, which will result in creditors being paid in part or in full:

• a lump sum payment to creditors either from your own money or money from third parties (eg family or friends)

• transfer of assets to creditors or the payment of the sale proceeds of assets to creditors and/or

• a payment arrangement with creditors (this could include deferral of repayments).

Who can propose a PIA?

You can propose a PIA under the following circumstances:

•

you must be insolvent (this means to be unable to pay your debts as and when they fall due)

• you must be in Australia or have an Australian connection (eg you usually live in Australia or carry on business in

Australia).

What are the eects of a PIA?

• When you appoint a controlling trustee, you commit an ‘act of bankruptcy’. A creditor can use this to apply to court

to make you bankrupt.

• Even if your attempt to set up a PIA fails, the appointment of a controlling trustee and the setting up of a PIA will

still be recorded on the NPII forever.

• Y

our details will also appear on a record held by a credit reporting organisation for up to five years - or longer in

some circumstances.

• Once you have executed a PIA, you are automatically disqualified from managing a corporation until the terms of the

PIA have been complied with.

Page 7 of 30

What is the procedure?

You appoint a controlling trustee to take control of your property and put forward a proposal to your creditors. Only a

registered trustee, AFSA or a suitably qualied solicitor can act as a controlling trustee.

The controlling trustee examines the proposal, makes enquiries into your nancial aairs and reports to creditors. The

report will advise creditors of the amount they can expect from the proposal compared to the amount they could expect if

you became bankrupt, and make a recommendation whether it is in creditors’ interests to accept the proposal.

A creditors’ meeting must be held. This creditors’ meeting is advertised on AFSA’s website. If unable to attend, a creditor

can be represented by a proxy or attorney, or participate by telephone if facilities are available.

You must attend the meeting unless excused by the controlling trustee. At the creditors’ meeting, creditors consider and

vote on the proposal. The creditors may ask you questions before deciding how to vote. Acceptance requires a ‘yes’ vote

from a majority of creditors who represent at least 75% of the dollar value of the voting creditors’ debts (referred to as a

‘s

pecial resolution’).

If the proposal is accepted the creditors are bound by the terms of the PIA. Secured creditors’ rights in relation to dealing

with their security are not affected by a PIA. A trustee (who may be different from the controlling trustee but must be either

a registered trustee or AFSA) is appointed to administer the agreement.

If the proposal is rejected creditors will either:

• vote in favour of you becoming bankrupt (you do not have to follow the creditors’ decision but a creditor may start

bankruptcy proceedings if you do not voluntarily become bankrupt), or leave it up to you to decide how to resolve

your ﬁnancial difﬁculties.

• If the proposal is rejected or lapses, you cannot appoint another controlling trustee for six months without the

permission of the court.

Fees and charges

There is a fee* payable to AFSA when lodging a controlling trustee authority form. In addition to this, a controlling

trustee and PIA administrator will charge fees for examining your PIA proposal, investigating your nancial aairs,

preparing a report to creditors and holding the creditors’ meeting.

All funds realised by a trustee in an administration are subject to a realisations charge* which is paid by the trustee

directly to the government. Any interest earned on funds realised by the trustee is also payable to the government.

If you have executed a controlling trustee authority or a PIA and think the fees claimed by the controlling or PIA trustee

are too high or otherwise unreasonable, you may request that the Inspector-General in Bankruptcy reviews the trustee’s

fees. Note that certain conditions must be met before the Inspector-General will conduct a review.

*For current information see ‘Fees and charges’ on page 19 or visit our website at www.afsa.gov.au

Frequently asked questions

Can I change or end my PIA if my circumstances change?

You can make a written request to your trustee to vary the terms of the PIA. The trustee sends a notice of the

proposed variation to the creditors and, if none object in writing, the terms will be varied. If a creditor objects, a

creditors meeting can be called to consider the proposed variation.

Creditors, with the debtor’s written consent, can vary the terms of a PIA by passing a special resolution.

A PIA can also be terminated by a resolution of the creditors where the trustee is satised that you are not

complying with their obligations.

The court can set aside or terminate a PIA in certain circumstances.

When does a PIA come to an end?

Generally, a PIA will end when all the obligations that the PIA has created have been discharged. This will

usually be when the trustee has paid the nal dividend to creditors. You may request a certicate stating that all

the obligations under the PIA have been discharged from your trustee.

Further information can be obtained by:

•

talking to your controlling trustee or registered trustee

• contacting us on 1300 364 785

• seeking independent advice from an accountant or solicitor

• discussing your ﬁnancial affairs with a ﬁnancial counsellor.

Page 8 of 30

Bankruptcy

There are two ways you can become bankrupt:

1. presenting your debtor’s petition, referred to as voluntary bankruptcy or

2. a creditor (someone you owe money to) makes an application to court to make you bankrupt, referred to as

involu

ntary bankruptcy.

Voluntary bankruptcy

If you are unable to pay your debts and cannot come to suitable repayment arrangements with your creditors, you may

choose to voluntarily lodge a petition to become bankrupt (called a d

ebtor’s p

etition).

During and after your bankruptcy, you will face certain restrictions and have obligations placed upon you. You should

read the information in this publication and seek clarication from a nancial counsellor or contact us if anything is

unclear.

If you decide to proceed, you will need to complete and lodge a debtor’s petition and a statement of aairs with AFSA

within 28 days of signing the forms. Generally, debtor’s petition and statement of aairs forms are processed within a

24-48 hour period. When the forms are accepted by AFSA you become bankrupt. You will receive a letter containing

your bankruptcy number and outlining your duties and obligations whilst bankrupt. Please use your bankruptcy number

whenever you contact your trustee.

You should carefully read the section ‘Essential bankruptcy information’ which outlines what will happen to your assets,

income etc after bankruptcy.

The consequences of bankruptcy are serious and your bankruptcy cannot be cancelled if you change your mind.

Involuntary bankruptcy – when a creditor makes you bankrupt

If you are unable to pay your debts and have been unable to enter into an arrangement with your creditors and you haven’t

voluntarily made yourself bankrupt, a creditor to whom you owe $5,000 or more may apply to the court to have you made

bankrupt.

Generally, the process for making you bankrupt begins when a creditor applies for a bankruptcy notice, and serves it on

you demanding that you pay the money owed to the creditor within 21 days. A notice can only be issued if the creditor

has obtained a court judgment against you within the last six years and the total amount owing under the judgment (or two

judgments combined) is $5,000 or more.

If you do not pay the creditor by the time given in the notice, you commit an 'act of bankruptcy'. A creditor can then apply to

the court (called a creditor’s petition) to have you made bankrupt. The court gives you the opportunity to be heard before

making the order.

If after hearing the creditor’s case and any submissions you make, the court is satised that you have not paid the

creditor, the court makes an order (called a sequestration order) making you bankrupt. A trustee is appointed and you are

then required to ﬁle a statement of affairs with AFSA within 14 days of being notied of the order.

Failure to lodge your statement of affairs is an offence under the Bankruptcy Act and you could be prosecuted.

Note: the information provided above is regarding the general process followed by most creditors to make someone

bankrupt. If a creditor is currently taking steps to make you bankrupt and you wish to avoid bankruptcy, or if you dispute

the creditors claim(s), it is important that you seek independent legal advice.

You should carefully read the section ‘Essential bankruptcy information’ which outlines what will happen to your assets,

income, etc after bankruptcy.

Frequently asked questions

Can my application to voluntarily become bankrupt be rejected?

Yes. There are a number of circumstances which may result in your petition for bankruptcy being rejected. Your

petition may not be accepted if it appears from the information that is lodged with the petition that you are likely

to be able to pay the debts, AND you are either avoiding payment of a particular debt(s), OR have been bankrupt

previously.

Am I eligible to present a debtor’s petition?

A debtor is eligible to present a debtor’s petition for bankruptcy if they are in Australia or have an Australian

connection (eg the debtor does not usually live in Australia nor does the debtor carry on business in Australia).

Page 9 of 30

Is there a minimum amount I need to owe before I can go bankrupt?

No. you can become bankrupt voluntarily owing any amount. However, AFSA can reject your request to

become bankrupt under certain circumstances.

A creditor has made me bankrupt – what happens now?

If a creditor has made you bankrupt, you should make contact with your trustee without delay. If you are

unsure who your trustee is, contact AFSA and quote the court reference number that is on the sequestration

order. Your trustee will be able to provide you with information and will be able to answer your questions

about bankruptcy. You must cooperate with your trustee and provide information upon request. Failure to

cooperate with your trustee is an oence under the Bankruptcy Act.

You must complete and le a statement of aairs form within 14 days of being notied of your bankruptcy.

Is there a dierence between an involuntary and a voluntary bankruptcy?

The outcome and consequences are the same for someone who voluntarily petitions for bankruptcy and

someone who is made bankrupt by a creditor. The one exception is that a person made bankrupt by a court

order must le a statement of aairs within 14 days of being notied of their bankruptcy – and they are not

released from bankruptcy if they do not le their statement of aairs.

What are the consequences of bankruptcy?

1. Your assets may be sold

You will be able to keep ordinary household goods, tools (up to a certain value)* used to earn an income and a

vehicle (up to a certain value)* but other assets – including your house – can be sold by your trustee. You cannot

conceal, remove or dispose of any property inside or outside Australia. If you do, you may be subject to criminal

prosecution.

2. Your income, employment and business may be affected

If your income exceeds a certain limit* you may be required to make contributions from your income. You

cannot be a director of and/or manage a company. Some professional/licensing bodies may restrict or prevent

you from continuing in that trade or profession. You may not be able to hold certain public positions. If you are

in business and trade under a business name dierent to your own, you must tell everyone you deal with that

you are bankrupt. If you don’t, you may be subject to criminal prosecution. Whilst you are bankrupt you will be

prohibited from managing a company, without the permission of a court.

3. You may not be released from all debts

You are released from most of your unsecured debts (eg credit cards, personal loans, store cards) once you are

discharged from bankruptcy. Some types of debts are not covered by bankruptcy e.g. penalties, nes and child

support debts – you will have to continue to pay these. Further, if a debt that is covered by the bankruptcy is

found to have been incurred by fraud, then you will still owe the balance remaining upon discharge. If a debt is

secured against an asset (eg a mortgage on a house or car) and you do not maintain repayments, that creditor

can repossess and sell the asset; however any shortfall between the mortgage amount and the sale price will be

covered by your bankruptcy.

4. Your ability to travel overseas will be affected

You will not be able to travel overseas without the written permission of the trustee and you may be asked to

surrender your passport to the trustee. If your bankruptcy is administered by the Ocial Trustee, you will be

required to pay an overseas travel application fee.

5. Your name will appear on the National Personal Insolvency Index (NPII) forever

The NPII is a searchable public register. Credit reporting organisations will keep a record of your bankruptcy for

up to ve years - or longer in some circumstances.

6. Your ability to obtain future credit will be affected

You may nd it hard to borrow money and buy things on credit. You may nd it hard to rent, get electricity,

water or the telephone connected without paying a bond. Some banks may not let you operate an account or may

restrict how you can use your account. If you obtain credit above a certain amount* you must tell the supplier

that you are bankrupt.

* Limits are provided on the Indexed Amounts information enclosed with this pack or can be found on our

website www.afsa.gov.au.

Page 10 of 30

What is the role of a trustee?

A trustee is appointed to administer the bankruptcy. The duties of a trustee are specied in legislation and

trustees have to adhere to certain standards while administering your estate. In order to pay creditors, your

trustee will:

•

sell your assets, including those you acquire or become entitled to during your bankruptcy (although you will

be able to keep certain types of assets)

• recover any income you earn over a certain limit

• investigate your ﬁnancial affairs and may, in certain circumstances, recover property that you have

transferred to someone else prior to your bankruptcy.

You can choose to appoint a registered trustee by obtaining and providing their consent when you lodge your

petition to become bankrupt. If you do not choose a trustee, AFSA becomes your trustee and may arrange for

a registered trustee to be appointed. Otherwise, AFSA is initially appointed to administer your estate. Your

creditors may choose to change the trustee at any time.

If you are made bankrupt involuntarily, the court will appoint a trustee at the time of making the sequestration

order. Regardless of whether you have been made bankrupt voluntarily (debtor’s petition) or involuntarily

(sequestration order) the section ‘Essential bankruptcy information’ is relevant to you if you are bankrupt.

Further information can be obtained by:

•

contacting us on 1300 364 785

• talking to your trustee

• discussing your ﬁnancial affairs with a ﬁnancial counsellor.

Page 11 of 30

Essential bankruptcy information

Part A: Assets

What will happen to my assets in bankruptcy?

When you become bankrupt, a trustee is appointed to administer your bankruptcy and this may include selling certain

assets for the benet of your creditors (the people you owe money to). Assets are anything of value you own at the time of

becoming bankrupt, and anything you buy or receive or become entitled to during your bankruptcy.

What assets may I keep?

The Bankruptcy Act allows bankrupts to keep certain assets. These include:

•

most ordinary household items

• tools used to earn an income up to a certain limit*

• vehicles (eg cars or motorbikes) where the total value of the vehicles minus the sum owing under ﬁnance is no more

than a certain limit*

• most balances in regulated superannuation funds and payments from regulated superannuation funds received on

or after your date of bankruptcy (superannuation payments received before you go bankrupt are not protected)

• life insurance policies for you or your spouse, and the proceeds from these policies received after your bankruptcy

• compensation for a personal injury, such as an injury to you from a car accident or workers’ compensation (whether

received before or after the date of bankruptcy), and assets bought wholly or substantially with such compensation

• assets held by you in trust for another person (for example, a child’s bank account)

• if creditors agree, awards of a sporting, cultural, military or academic nature made to you, such as medals or

trophies, and claimed as having sentimental value.

What assets will my trustee sell?

Apart from the assets that you are allowed to keep, your trustee may recover any asset, even if they are overseas or in

someone else’s possession. Examples can include:

•

houses, apartments, land, farms and business premises (including leases)

• motor vehicles (other than exempt ones)

• shares and other investments (including shares held in your employer’s business)

• tax refunds for income earned before you became bankrupt

• proceeds of a deceased estate where the person dies before or during your bankruptcy

• lottery winnings and other competition prizes.

Assets that vest in the trustee

All of the assets that belonged to you at the start of your bankruptcy, or that you get during the bankruptcy, 'vest' in the

rustee (unless the property is specically exempt). This means the trustee is given the power and authority to deal with

the asset(s) and you no longer have any claim to them and no longer have any right to deal with them. The trustee has

rights to take physical possession of and control of the assets, including the right to sell them. If bankrupt, you are not

permitted to deal with property that belongs to the trustee, even if it’s still registered in your name.

What about assets I own with someone else?

If you have a share in an asset, for example a house that you own with your partner, your share of the asset vests in the

trustee, and the trustee can sell your share. If the co-owner is not bankrupt, the trustee may agree to sell your share to

them for market value.

What about assets I used to own?

Your trustee has powers to investigate assets you owned before your bankruptcy. If you have given away or sold assets

for less than their value prior to bankruptcy, the trustee may either recover these assets (that is, take possession of them

and deal with them) or the dierence between the true value of the asset and the amount you received for it. These types

of asset transfers are called antecedent transactions.

* Limits are provided on the Indexed Amounts information enclosed with this pack or can be found on our website

www.afsa.gov.au.

Page 12 of 30

What about secured assets?

Common examples of secured assets are:

•

a house subject to a mortgage with a bank

• a motor vehicle subject to a bill of sale

• goods under hire purchase, chattel mortgage, lease or bill of sale with a ﬁnance company

• real estate subject to a charge by local councils for outstanding rates or water charges.

A secured creditor cannot take possession of an asset just because you are bankrupt. However, if you fall behind in your

payments, they can take and sell the assets (whether or not you are bankrupt) to oset the debt owed.

Legal claims you may have against someone

When you become bankrupt, most legal actions that you have commenced need to cease. Your trustee will determine

whether to take any matter(s) further and in order to make this decision may seek from you documentary evidence

regarding the legal proceedings. Other actions you believe need to be pursued will need to be brought to the attention of

and discussed with your trustee. Your trustee will make an assessment on the viability of the action or whether it is an

action you may continue with.

If your claim relates to a personal injury or wrong done to you, your spouse or a member of your family, or it relates to the

death of your spouse or a member of your family, you may be entitled to pursue that claim even after you have become

bankrupt. It is important to discuss these issues with your trustee who can provide you with further information in

relation to such actions or claims.

Assets that haven’t been dealt with before your bankruptcy ends

Your discharge from bankruptcy does not automatically return assets to you which have not yet been dealt with by your

trustee. The trustee may have been unable to sell all your assets straight away and may take several years to sell them. If

there are assets that vested in your trustee and your bankruptcy is annulled (that is, cancelled), the unsold assets will be

returned to you, together with any surplus proceeds held.

How will the trustee know what assets I have?

The trustee can get information about your assets from a variety of sources including:

•

your statement of affairs

• asking you for information

• from your creditors

• from searching the Personal Property Securities Register and State/Territory land title databases

• from third parties.

There are penalties for failure to disclose your assets, whether owned prior to bankruptcy or acquired during your

bankruptcy. These penalties can include extending your bankruptcy and imprisonment for up to 12 months upon

conviction. Should you acquire or become entitled to assets during your bankruptcy, you must disclose all of these to the

trustee, in writing, within 14 days or as soon as practicable.

Part B: Your employment and income

The Bankruptcy Act does not restrict you (the bankrupt) from being employed and earning an income during your

bankruptcy.

The Bankruptcy Act does not require bankrupts to disclose their bankruptcy when applying for employment. However, a

prospective employer might ask for this information or choose to search the NPII to nd out.

Many professional associations and licensing authorities have their own conditions around bankruptcy of their

members. This is not regulated by the Bankruptcy Act and is at the discretion of each body. You should conrm directly

with the organisation of which you are a member as to whether bankruptcy will aect your professional membership or

your ability to practice a particular trade.

Under the Corporations Act, bankrupts are prevented from managing corporations unless they obtain approval from

the court. The Corporations Act is administered by the Australian Securities and Investments Commission (ASIC) and

enquiries about companies should be directed to ASIC.

What happens to my income while I am bankrupt?

If your after-tax income exceeds a certain amount you will have to pay contributions from your income to your trustee.

You will be required to pay half of the amount you earn above the prescribed threshold to your trustee. Your trustee will

calculate the amount you are liable to pay for each year of your bankruptcy and will send you a notice of assessment that

outlines the total amount due, instalments (if applicable) and how to make your payments.

Page 13 of 30

What is the prescribed threshold?

The Bankruptcy Act sets out the criteria for calculating the threshold. The threshold that applies to you will depend on

how many dependants you have. The Bankruptcy Act denes a dependent as a person who satises all three of these

criteria:

•

the person resides with you

• the person is wholly or partially dependent on you for economic support

• the person’s income is less than a certain amount.

If I have to pay contributions, how much will I have to pay?

You will be required to pay one half of the amount by which your after-tax income exceeds the prescribed threshold*

amount ie 50 cents of every $1 of the excess amount.

How are contributions calculated?

Note: 'income'

for income-contribution purposes under the Bankruptcy Act has a wide meaning and includes certain

amounts that are not included in taxable income.

At the start of your bankruptcy your trustee will calculate whether you will be required to pay any income contributions

during the rst year of your bankruptcy. Also, the trustee will repeat that process at the start of each subsequent year of

your bankruptcy. The calculation is done using the following formula:

‘assessed income’ minus ‘actual income threshold / 2, [(assessed income - actual income threshold) / 2].

What is 'assessed income'?

The Bankruptcy Act denes what the trustee should include when assessing the income of a bankrupt. It is important to

note that this diers from the Australian Taxation Oce’s assessment of taxable income. The trustee’s assessment will

include (but is not limited to) a consideration of your:

• wages and salary from all jobs

• tax refunds

• taxable fringe beneﬁts

• salary sacriﬁce arrangements

• superannuation receipts, annuities and pensions

• business proﬁts

• loans from associated entities

• income you earn which is paid to someone else (including to a company or trust)

• superannuation contributions in excess of 9% made by an employer that arise from an industrial agreement solely

between you and your employer

• income earned overseas.

Note: there is a range of factors that will have an impact on the calculation of your assessed income for contributions

purposes. Contact us or your registered trustee for an estimate based on your circumstances. Details of the current

prescribed thresholds can be found in the Indexed Amounts information in this pack or on our website at

www.afsa.gov.au.

Expenses

Expenses will be treated dierently by your trustee compared to how the Australian Taxation Oce treats them and will

be determined based on the specic circumstances.

Information you must provide to your trustee

You must disclose all of your income and benets and any other information reasonably requested to your trustee. If you

fail to do so penalties may apply. You must also advise your trustee immediately if your income or number of dependants

changes, or if you think these details will change in the next 12 months.

Consequences of non-payment

The obligation to pay your income contributions is contained in the Bankruptcy Act. If you do not comply with your

trustee’s payment schedule, the trustee may consider one or all of the following:

•

automatically deducting funds from your income or bank account without your consent (garnisheeing)

• objecting to your discharge and extending your bankruptcy by ﬁve years and assessing additional contributions for

this period

• obtaining a judgment for unpaid contributions and taking enforcement action against you after you are discharged

requiring you to open a supervised bank account into which all your income must be paid and from which any

withdrawals must be authorised by the trustee.

* Limits are provided on the Indexed Amounts information enclosed with this pack or can be found on our website

www.afsa.gov.au.

Page 14 of 30

What if my circumstances change?

You must advise your trustee immediately if your income or number of dependants change, or you think these details will

change in the next 12 months. If you fail to do so, your assessment may be incorrect and you may pay too much or not

enough. At the end of each 12 month period your trustee will re-assess your contribution liability based on your actual

income and dependants for the period. If you have not paid enough because your income was greater than you estimated

then you will have to make up the shortfall. If you have paid too much the extra payments cannot be refunded but they

will be credited to the next assessment.

Hardship variations

There are specific hardship provisions in the Bankruptcy Act which are limited to exceptional circumstances that would

impose an excessive financial burden. The list of what constitutes '

hardship' for the purposes of the Act is specific, and

your trustee does not have discretion to grant hardship for expenses that aren’t listed in the Bankruptcy Act.

The exceptional circumstances are:

• ongoing medical expenses

• costs of child day care essential for work

• particularly high rent when there are no alternatives available

• substantial expenses of travelling to and from work

• loss of ﬁnancial contribution, usually made by your spouse, to the costs of maintaining your household.

Applications for hardship must be in writing, must explain why you will suer hardship and must include documentary

evidence of your income and expenses. Your trustee will make a decision on your application within 30 days after

receiving your application and sucient supporting evidence and will give you a written notice setting out the reasons

for their decision.

Review of income and hardship assessments

If your trustee completes an income assessment and you disagree with the outcome, you should contact your trustee in

the rst instance. The same applies if you are dissatised with a decision made by your trustee regarding a hardship

request. If you still disagree you may request a review of the trustee’s decision by the Inspector-General in Bankruptcy.

The request for review needs to be in writing and must be lodged within 60 days of you being notied of the assessment.

You must still make payments during the appeal period.

Part C: Debts and creditors

Once you are bankrupt, unsecured creditors should stop contacting you. To make sure this happens you must list all

your debts in your statement of aairs when you apply to become bankrupt, including:

•

debts you owe jointly with someone else

• any loans to you from friends or relatives

• debts that you will still need to pay if you are bankrupt.

Your bankruptcy will not aect a creditor’s right to pursue another person, such as:

•

a person who is a guarantor for your debts

• a person with who you owe debts jointly (eg your partner).

Debts you still have to pay both during and after bankruptcy

You still have to pay certain debts despite becoming bankrupt. These include debts which are not provable in

bankruptcy, such as:

•

court imposed penalties and ﬁnes

• unliquidated damages you are liable to pay due to accidents, eg. a car accident, except under certain circumstances

• student assistance/supplement loans (HELP - Higher Education Loan Program/HECS - Higher Education

Contribution Scheme/SFSS - Student Financial Supplement Scheme)

• debts you incur after your bankruptcy commences.

The ATO may keep your tax refund and oset it against any debt you owe the Commonwealth, eg. to the ATO or the

Department of Human Services (Child Support or Family Assistance).

To avoid suspension of your driver’s licence and/or your motor vehicle registration, you will need to pay your debts for

parking, trac and other infringements of state laws. Most states have the power to suspend your licence and/or your

motor vehicle registration until payment is made.

If you fail to pay certain debts for essential services to your home (eg electricity, gas, telephone) it may result in

disconnection of these services.

Page 15 of 30

Debts you have to pay after your bankruptcy ends

Although you are released from most debts at the end of your bankruptcy, there are some that you still have to pay. These

include:

•

debts incurred by fraud

• maintenance debts, including child support

• accumulated HECS and HELP debts

• unliquidated damages other than those arising from a contract, promise or breach of trust.

How will my creditors be aected?

Unsecured creditors generally lose the right to recover their debts eg:

•

banks, ﬁnance companies and credit unions for personal loans, credit cards and store cards

• service providers, doctors, lawyers and trades people.

If you become bankrupt, any legal action taken against you in relation to unsecured debts must stop, eg a summons, a

garnishee from your income or bank account or recovery action by a sheri or baili. If creditors continue to demand

that you pay their debt, you should immediately tell your trustee who will inform the creditor of your bankruptcy. If you

are being harassed or coerced about debts, you may obtain further information from the Australian Competition and

Consumer Commission website at www.accc.gov.au or call their information centre on 1300 302 502 regarding your

rights as a consumer and the procedures to lodge a complaint.

Secured creditors hold security over your asset(s) which entitles them to take and sell them if you fall behind in

payments, eg:

•

banks with a mortgage over a house

• ﬁnance companies with a chattel mortgage, lease or bill of sale over a car, furniture or electrical goods

• hire purchase arrangements where you have not paid the full amount

• creditors secured by government legislation over houses and land, such as council/shire rates and water rates.

If you become bankrupt, secured creditors may contact you to nd out what will happen to the assets. You may be able

to make arrangements to keep a secured asset with no equity. However, you should talk to a nancial counsellor or

bankruptcy trustee beforehand.

Some creditors may retain ownership of items purchased from them until their debt has been paid in full (eg sales subject

to retention of title clauses, goods on consignment or commission). Creditors holding a security deposit or bond (eg a

landlord) are entitled to keep it to reduce your debt.

If you have diculty determining whether your debts are secured, you should talk to your creditors and ask whether your

debts are secured or unsecured. You can also talk to a nancial counsellor if you are unsure about what types of debts

and creditors you have.

Part D: Overseas travel

Can I leave Australia if I become bankrupt?

You can only leave Australia if you obtain your trustee’s written permission before you commence making any

preparations to leave. Your trustee will need to be satised that you have legitimate reasons for the proposed travel, for

example as a condition of your employment or for compassionate reasons. If your trustee is the Ocial Trustee, you will

also be required to pay an overseas travel application fee.

Your trustee may impose conditions when giving permission such as:

•

the period of travel

• the date you are required to return to Australia, and/or

• that any income contributions (compulsory sums from your income to repay your creditors) that you have been

assessed to pay are paid before you go.

You may have a passport; however, you must hand it to your trustee if directed to do so.

Your trustee may refuse permission if:

•

you have not carried out all of your obligations under the Bankruptcy Act, for example if you have not ﬁled your

statement of affairs

• you are required to assist your trustee in the administration of your bankruptcy

• the trustee’s investigations have not been completed.

Warning: If you leave Australia without your trustee’s written permission or you leave with permission but fail to return

when you said you would, your trustee may lodge an objection to your discharge extending your period of bankruptcy to

ve years from the date you return to Australia. If you are overseas and your trustee asks you to return to Australia and

you do not, your trustee may lodge an objection to your discharge. If this happens, your bankruptcy will be extended for

two years from the date you return to Australia.

Page 16 of 30

Leaving or trying to leave Australia without the written consent of your trustee is an oence under the Bankruptcy

Act. The penalty for this, upon conviction, is up to three years’ imprisonment. Breaching a travel condition imposed

by your trustee is also an oence under the Bankruptcy Act. The penalty for this, upon conviction, is up to 12 months

imprisonment.

How do I apply for permission?

As soon as you become aware that you may need to leave Australia you should contact your trustee and discuss your

situation. You should then write to your trustee giving:

•

the reasons for the proposed trip

• the names of the countries you propose to visit

• the date you intend to leave Australia

• the date you intend to return to Australia

• if someone else is paying for the trip, the name of the person paying for the trip, the cost of the trip and a conﬁrming

letter from that person

• an email address, telephone number and overseas address where your trustee can readily contact you

• your current annual income

• your proposed arrangements for paying any contribution liability whilst overseas.

Your trustee must have adequate time and information to consider your request. Your request should be in writing so that

your trustee understands exactly what you are requesting. You will be advised promptly of the trustee’s decision and any

conditions placed on your travel.

If you are not satised with your trustee’s decision, try to resolve your concerns with them directly. If you are still not

satised with your trustee’s decision, you may apply to the Federal Court or the Federal Circuit Court for review. You

should seek legal advice before you do this.

If your trustee is the Official Trustee, it is preferred that you complete a 'Request for Consent to Travel Overseas While

Bankrupt'

form as it contains all information required to gain permission. You will also need to pay the overseas travel

application fee.

Part E: When your bankruptcy ends

When will I be discharged from bankruptcy?

If you became bankrupt by presenting your own petition (that is, by debtor’s petition), you will be due for discharge three

years and one day after you led that petition and your statement of aairs with AFSA. If one of your creditors made

you bankrupt by a sequestration order of the court, you will be due for discharge three years and one day after AFSA

accepted your completed statement of aairs. It is therefore important to lodge your statement of aairs promptly as any

delay can mean you will be bankrupt for longer than three years.

In some cases, your bankruptcy can be extended to ve or eight years. This happens when your trustee lodges an

objection to your discharge.

Your trustee may lodge an objection on a number of grounds, such as your failure to:

• provide information to, and assist your trustee

• disclose to your trustee all income

• explain how money was spent or

• reveal all assets to creditors.

More than one objection can be lodged. You may request a review of an objection by the Inspector-General. A written

request for review must be lodged within 60 days of you being notied of the objection. Contact AFSA for further

information about reviews of objections.

Do I have to apply for discharge?

No. If you would like conrmation of your discharge, you can either ask your trustee or obtain a National Personal

Insolvency Index (NPII) extract that will show your date of discharge.

What happens after I am discharged?

Your name will appear on the National Personal Insolvency Index (NPII) forever, and on a commercial credit record

for up to ve years - or longer in some circumstances. If there is property that vested in the trustee when you became

bankrupt and it has not yet been dealt with, you don’t automatically get it back.

The administration of your bankruptcy may continue after you are discharged – for example, your trustee may not have

nalised investigations or the sale of assets, or you may still have income contributions to pay. The Bankruptcy Act says

that a discharged bankrupt must still:

• assist their trustee to ﬁnalise the administration of the bankruptcy

Page 17 of 30

• advise their trustee of any change of address

• provide information about their ﬁnancial circumstances if requested to do so

• pay outstanding income contributions.

You also have continuing obligations to:

•

give up secured assets if required by the relevant secured creditors

• pay debts that are not released by bankruptcy.

Part F: Annulment

What is annulment?

Annulment is eectively the cancellation of a bankruptcy. There are three ways a bankruptcy may be annulled:

1. Annulment by payment in full - you pay all your debts in full, including interest, the realisations charge and

your trustee’s expenses and fees. The realisations charge is a percentage of amounts received by a trustee from

the sale of a bankrupt’s assets or repayment of debts that must be paid to the government.

2. Annulment by composition or arrangement - your creditors accept a composition or arrangement, which is an

oer of something less than payment in full.

3. Annulment by court order - you successfully apply to the court for an order annulling your bankruptcy.

What are the eects of an annulment?

Your name will appear on the NPII forever, with the record showing that your bankruptcy was annulled. Credit

reporting organisations also keep records of bankruptcies for up to ve years - or longer in some circumstances. Other

consequences of annulment are:

•

assets not needed by your trustee to pay the trustee’s fees and expenses and your creditors will be returned to you

• creditors to whom you have granted security over an asset (eg mortgages) will still have their rights in relation to

those assets, which may include the power to seize and sell them if you default in repayments

• you are still liable for the payment of debts that are not provable in bankruptcy.

Annulment by payment in full

Your bankruptcy will be annulled providing:

•

your creditors, and any interest payable on debts to creditors, and the realisations charge, and your trustee’s

expenses and fees have all been paid in full.

Contact your trustee to nd out how much you will be required to pay. The money required for payment in full usually

comes from the sale of assets by your trustee or from a source not otherwise available to the trustee, such as money

provided by a relative. Your bankruptcy will be annulled on the date of the nal payment is made from your estate.

Annulment by composition or arrangement

Compositions or arrangements are oers made by bankrupts through their trustees to nalise their debts. Usually, the

trustee prepares a report about the proposal and advises creditors whether the proposal will benet them. A meeting is

then held whereby creditors can vote on whether or not to accept the oer. An oer:

•

may involve assets already in the bankruptcy and/or,

• may include other money or assets that would not normally be available to creditors, such as money provided by a

relative.

These oers benet creditors as they receive a dividend that would not otherwise be available. All creditors will receive

an equal rate of dividend unless your oer provides otherwise.

Your written and signed oer must be lodged with the trustee:

•

setting out the terms

• providing for the payment of the trustee’s fees and expenses

• providing for payment of the realisations charge.*

Before nalising your oer and asking your trustee to call a creditors meeting, you should discuss:

•

the requirements for making an offer with your trustee

• what your creditors may be willing to accept. This is in your interests and will save considerable time and resources

which would be wasted if an offer is not accepted at the meeting of creditors.

The initial fees payable to cover the costs of calling the creditors meeting will not be refunded regardless of the outcome of

the meeting.

Your trustee may:

•

require a deposit to cover the expenses and fees of the meeting

• refuse to call a meeting if the offer does not make adequate provision for the payment of trustee’s fees that have

been approved by creditors and cannot be taken out of the estate.

Page 18 of 30

You must attend the meeting if requested to do so by your trustee. You may amend the terms of your oer at the meeting

but not in any way that would reduce the trustee’s fees.

Acceptance requires a 'yes' vote from a majority of creditors who represent at least 75% of the dollar value of the voting

creditor’s debts (referred to as a 'special resolution').

f your oer is accepted your bankruptcy will be annulled immediately and:

• your trustee’s fees and charges will be paid

• your creditors will be paid.

All creditors with provable debts that would have been extinguished upon discharge are bound by the terms of the oer.

Some debts will still need to be repaid though (such as child support, HECS/HELP/SFSS debts, debts incurred by fraud

and debts incurred after your date of bankruptcy) – these are the same debts that would still need to be repaid if you

didn’t oer a composition or if your composition oer is rejected.

If your oer is rejected your bankruptcy will continue. Your trustee will:

•

keep funds covering the expenses and fees of calling the meeting from any deposit

• refund any money provided for the offer.

Variation, setting aside or termination of a composition or arrangement

Your creditors or the trustee can, with your consent, propose a variation of your composition or arrangement. The

variation proposal is put to creditors for consideration and your trustee will notify you of the outcome.

The Inspector-General, your creditors or trustee can apply to the Federal Court or Federal Circuit Court to set aside your

composition or arrangement if:

•

it is unreasonable

• it does not comply with the Bankruptcy Act

• you have supplied misleading or false information

• you are in default of any of the terms.

Your creditors can terminate the composition or arrangement by resolution at a meeting convened by the trustee for this

purpose.

Your trustee can terminate a composition or arrangement if satised you are in default and a notice is sent to all creditors

specifying when the termination is to occur and giving them an opportunity to object. If no objection is lodged with the

trustee, termination occurs on the proposed date.

The court may also terminate a composition or arrangement on application by the trustee, a creditor or you in

circumstances where you have not complied with a term of the composition or arrangement, and if the court considers

there is a sucient element of injustice or undue delay if the composition or arrangement was to proceed. In addition the

court has broad discretion to terminate if it determines that there is sucient reason to do so.

Your creditors or trustee can petition to make you bankrupt again at the same time as applying to have your composition

or arrangement set aside or terminated.

*For current information see ‘Fees and charges’ on page 19 or visit our website at www

.afsa.gov.au

Part G: Fees and charges

A trustee is entitled to a fee for administering your bankruptcy.

Where AFSA is the trustee of the administration, the fee is set by legislation and is generally based on a percentage of

the funds realised*. The fee is not recoverable directly from you unless you are seeking an annulment of the bankruptcy.

Where a registered trustee is the trustee of the administration, the fee* is generally based on an hourly rate. Where there

are insucient funds in an administration, a registered trustee can recover a statutory minimum fee*.

If you are dissatised with the amount of fees charged by your trustee you may request that an independent review of the

trustee’s remuneration (including fees and disbursements) be undertaken by the Inspector-General in Bankruptcy. The

Inspector-General in Bankruptcy will undertake the review provided certain conditions are met. For further information

please refer to Inspector-General Practice Statement 16 which can be found at www.afsa.gov.au

Funds realised by a trustee in an administration are subject to a realisations charge (a government levy) which is

paid by the trustee directly to the government. Any interest earned on funds recovered by the trustee is payable to the

government.

*For current information see ‘Fees and charges’ on page 19 or visit our website at www.afsa.gov.au

Page 19 of 30

Fees and charges

All fees and charges are listed in Australian dollars (AUD).

All fees have been determined in accordance with

Bankruptcy (Fees and Remuneration) Determination 2015 with eect

from 1 July 2015 or the

Bankruptcy (Estate Charges) (Amount of Charge Payable) Determination 2015 with eect from

1 July 2015.

Service fees

All fees and charges are exempt from GST unless otherwise indicated.

Advertising creditors’ meetings

Publishing a notice advertising creditors' meetings on AFSA's website $260 (includes GST)

Bankruptcy Register Search of the National Personal Insolvency Index (NPII)

Online self service search using Bankruptcy Register Search $15

Inspection of public documents

Inspecting a publicly-available document $45

Bankruptcy notice application

Application for a bankruptcy notice $470

The fee is charged for applying for a bankruptcy notice and is payable at the time of making the application. The fee is payable

whether or not the Ocial Receiver issues the bankruptcy notice.

Application for extension of time for the service of a bankruptcy notice $160

Debt agreements

Debt agreement proposal lodgement fee $200

Personal insolvency agreements

Document processing fee (payable when controlling trustee authority is lodged

with AFSA)

$240

Overseas travel

Overseas travel application fee $150

Ocial Receiver notice issued at a trustee’s request

Application for statutory notice $480 (excluding disbursements)

Taxation services

Taxation of a bill of costs in relation to the administration of an estate $50 per 15 minutes or part thereof

(includes GST)

Taxation of a trustee’s remuneration in an estate $50 per 15 minutes or part thereof

(includes GST)

This only applies to bankruptcies, Part X section 188 authorities and personal insolvency agreements that commenced prior to

1 December 2010. For arrangements after that date see Division 4 of the Bankruptcy Regulations 1996.

Trustee and administrator registrations and renewals

Application to be registered as a trustee or debt agreement administrator $2,200

Initial registration $1,300

Renewal of registration (every 3 years) $1,700

Page 20 of 30

Realisations charge

Realisations charge 7% of the money received by trustees and administrators in bankruptcies,

debt agreements, compositions and personal insolvency agreements

Interest charge

Interest charge The interest earned net of

bank charges

Administration fees

All fees and charges are inclusive of GST unless otherwise indicated.

Administration of Fee

Bankrupt estates

$4,000 + 20% of money received.

Where a bankruptcy administration includes the management of a debtor’s

business, an additional fee of $62.50 per 15 minutes applies for time spent in

managing the business.

Compositions (s73 of the Bankruptcy

Act)

20% of value of the proposal accepted by creditors. This fee is in addition to

the fee (if any) for administering the bankruptcy.

Debt agreements 20% of value of the proposal accepted by creditors.

Controlling trustee authorities

(s188 of the Bankruptcy Act)

$62.50 per 15 minutes or part thereof. This fee is in addition to the fee (if any)

for administering the bankruptcy.

Personal insolvency agreements 20% of the value of the proposal accepted by creditors.

Pre-bankruptcy control orders (s50 of

the Bankruptcy Act)

$62.50 per 15 minutes or part thereof.

When AFSA administers a bankruptcy

• We will only be paid (in full or part) if money is received in the administration.

• If we don’t receive enough money to cover fees and expenses, the shortfall cannot be recovered from a bankrupt or

creditors.

•

While a bankrupt may secure an annulment, our full fee and cost of the administration must still be paid.

Our fees for administering bankruptcies vary according to money received. For example, if we receive $10 000 in a

bankruptcy; the fees will be $6,000 ($4,000 + 20% of $10,000).

There is one exception to this rule, namely where the bankruptcy is transferred by AFSA to another trustee or

vice versa.

If the administration of the bankruptcy is transferred from AFSA or is transferred to AFSA, fees are determined on a time

cost basis ($62.50 for 15 minutes or part thereof) for the period during which AFSA administers the estate.

Page 21 of 30

Quick comparison of features between

dierent types of personal insolvency

administrations

Eligibility

Bankruptcy Debt agreement

Personal insolvency

agreement

Australian connection Must have a residential or

business connection.

No residential or business

connection required.

Must have a residential or

business connection.

Previous insolvency While previous insolvency

does not by itself make a

person ineligible, AFSA

may not accept the petition

if the debtor was previously

bankrupt and some other

conditions are met.

Must not have been a

bankrupt, proposed a

personal insolvency

agreement or made a debt

agreement in the previous

10 years.

Must not have proposed

another personal insolvency

agreement in the previous

six months.

Income threshold No. Yes. See the indexed

amounts information

enclosed with this pack or

at www.afsa.gov.au.

No.

Asset threshold No. Yes. See the indexed

amounts information

enclosed with this pack or

at www.afsa.gov.au.

No.

Debt threshold No. Yes. See the indexed

amounts information

enclosed with this pack or

at www.afsa.gov.au.

No.

Income, employment and trade

Bankruptcy Debt agreement

Personal insolvency

agreement

Payments from

income required?

Yes, mandatory payments

required if income exceeds a

statutory threshold.

Yes, if the terms of the

agreement require payments

from income – this occurs in

most cases.

Only if the terms of

the agreement require

payments from income.

Ability to continue to

operate a business

May be possible depending on

the nature of the business and

whether business assets are to

be sold by the trustee. If trading

under a business name or

assumed name (whether alone

or in partnership) bankruptcy

must be disclosed to all people

dealing with the business.

Yes, unless terms of

the agreement provide

otherwise. If trading under a

business name or assumed

name (whether alone or

in partnership) the debt

agreement must be disclosed

to all people dealing with the

business.

Yes, if agreement allows

for debtor to continue to

operate the business.

Ability to be a director

of, or otherwise

manage, a corporation

No. Yes. Not until terms of

agreement fully complied

with.

Other employment

restrictions

Professional bodies and/

or trade associations may

have certain conditions of

membership for the duration of

the bankruptcy. There may be

restrictions on holding some

statutory positions during the

period of bankruptcy.

Professional bodies and/

or trade associations may

have certain conditions of

membership for the duration

of the agreement. There may

be restrictions on holding

some statutory positions

during the period of the

agreement.

Professional bodies and/

or trade associations may

have certain conditions

of membership for the

duration of the agreement.

There may be restrictions

on holding some statutory

positions during the period

of the agreement.

Page 22 of 30

Assets

Bankruptcy Debt agreement

Personal insolvency

agreement

Ability to retain assets No, unless it is exempt

property (for example,

household furniture, tools of

trade up to a certain value).

Yes, unless terms of

the agreement provide

otherwise.

Yes, subject to the terms of the

agreement.

Ability to retain

assets acquired

during the period

of the agreement/

bankruptcy

No, unless property being

acquired is exempt property.

Yes. Yes.

Can assets previously

sold or transferred for

less than market value

be recovered?

Yes, subject to certain

statutory conditions being

met.

No. Not unless the agreement

species that the antecedent

transaction provisions of the

Bankruptcy Act apply to the

debtor.

Can payments made

to creditors prior

to the agreement/

bankruptcy be

recovered?

Yes, subject to certain

statutory conditions being

met.

No. Not unless the agreement

species that the antecedent

transaction provisions of the

Bankruptcy Act apply to the

debtor.

Debts

Bankruptcy Debt agreement

Personal insolvency

agreement

Unsecured debts Unsecured creditors receive

pro rata payment from funds

recovered by the trustee after

fees and costs have been

deducted. There are some

statutory priority payments to

particular classes of creditors

like employees.

All unsecured creditors

receive pro rata payments.

Unsecured creditors can

receive dierential payment

rates if the terms of the

agreement provide for this.

There are some statutory

priority payments to particular

classes of creditors like

employees.

Secured debts Rights of secured creditors

are not aected. They can

repossess assets if there is

default in payment.

Rights of secured creditors

are not aected. They can

repossess assets if there is

default in payment.

Rights of secured creditors

are not aected. They can

repossess assets if there is

default in payment.

Release from debts Upon discharge from

bankruptcy, but not released

from some types of debts.

Upon completing terms of

agreement, but not released

from some types of debts.

As per terms of the agreement,

but not released from some

types of debt.

Restrictions

Bankruptcy Debt agreement

Personal insolvency

agreement

Ability to travel

overseas

Prior consent of trustee

required. If trustee the

Ocial Trustee, an

application fee applies.

No statutory restriction. No statutory restriction.

Ability to travel

within Australia

No statutory restriction. No statutory restriction. No statutory restriction.

Incurring further debt Must disclose insolvency if

incurring debt or obtaining

goods and services in

excess of a threshold.

See the indexed amounts

information included with

this publication.

Must disclose insolvency if

incurring debt or obtaining

goods and services in excess

of a threshold. Yes. See the

indexed amounts information

enclosed with this pack or at

www.afsa.gov.au.

No statutory restriction.

Page 23 of 30

Fees and charges

Bankruptcy Debt agreement

Personal insolvency

agreement

Statutory ling fee No. Yes. See the indexed

amounts information

enclosed with this pack or

at www.afsa.gov.au.

Yes. See the fees and

charges information

included with this

publication.

Statutory levies A government levy is

imposed on all receipts in

the administration. Any

interest earned on these

receipts is also paid to

government. See the fees

and charges information

included with this

publication.

A government levy is

imposed on all receipts in

the administration. Any

interest earned on these

receipts is also paid to

government. See the fees

and charges information

included with this

publication.

A government levy is

imposed on all receipts in

the administration. Any

interest earned on these

receipts is also paid to

government. See the fees

and charges information

included with this

publication.

Fees for administration of

estate/s

Subject to creditor approval.

Fees can be reviewed upon

application to the Inspector-

General.

Note: AFSA’s fees are set

by statute. See the fees

and charges information

included with this

publication.

Subject to creditor approval.

Note: AFSA’s fees are set

by statute. See the fees

and charges information

included with this

publication.

Subject to creditor approval.

Fees can be reviewed upon

application to the Inspector-

General.

Note: AFSA’s fees are set

by statute. See the fees

and charges information

included with this

publication.

Page 24 of 30

Notes

Page 25 of 30

Glossary

Act of bankruptcy

An action, event or declaration listed in sections 40 of the Bankruptcy Act 1966 which can be used by a creditor to

apply to the court to make a person bankrupt. An act of bankruptcy must be established before the court may make a

sequestration order against the estate of the debtor. Refer to sections 40 and 43 of the Bankruptcy Act 1966.

Advertising of creditors meetings

Publication of a notice on our website advertising meetings of creditors.

Antecedent transaction

A transaction that has taken place prior to a personal insolvency agreement or bankruptcy that is void against the

trustee. They include transactions where less than market value has been paid for an asset, a transfer has been made

to prevent the property becoming divisible among creditors, or preferential payments are made to a specic creditor. A

trustee has the ability to recover the asset or the dierence between the price paid and the value at the time of

the transfer.

Bankruptcy

A process where people, who cannot pay their debts, become bankrupt to receive the protection of the Bankruptcy Act

1966 and their estate is administered by a trustee. It allows for the fair distribution of property among creditors and the

prosecution of dishonest debtors.

Bankruptcy Act 1966

The Commonwealth legislation which covers personal insolvency, including bankruptcy, Part IX (debt agreements) and

Part X (personal insolvency agreements) arrangements. It deals with individuals. Corporate entities are covered by the

Corporations Law administered by the Australian Securities and Investments Commission.

Bankruptcy notice

A formal, nal demand for payment of a debt by a creditor owed at least $5000 on one or more nal judgments or nal

orders. This notice is issued by the Ocial Receiver at the request of creditor(s), who must have judgments (from a court

of competent jurisdiction) to back up their claim that they are owed money. Failure to comply with a bankruptcy notice

constitutes an act of bankruptcy.

Bankruptcy Register Search (BRS)

The BRS is an AFSA online service that accesses information from the National Personal Insolvency Index (NPII) for

a fee.

Charge

A form of security that ensures the repayment of a debt (or the performance of an obligation) by providing that, should

the debt not be repaid, the creditor has rights to be paid, usually out of the proceeds of the sale of an asset.

Consent to act

A consent to act and trustee declaration form, completed by a trustee or two trustees who wish to act together, gives

consent for the registered trustee to act as the trustee of an administration. A consent to act could be sourced by a

creditor prior to a sequestration order being made, a debtor prior to lodging their debtor’s petition or a trustee wishing to

transfer the administration to another trustee.

Contribution

A sum of money calculated on the basis of a statutory formula applied to the bankrupt’s income which is required to be

regularly paid to the trustee. It is also called a compulsory contribution.

Controlling trustee

A person (a registered trustee, the Ocial Trustee or an eligible solicitor) who investigates a debtor’s nancial aairs

and calls a meeting of the debtor’s creditors under Part X of the Bankruptcy Act.

Page 26 of 30

Court

In the context of bankruptcy, the court usually refers to the Federal Court of Australia or the Federal Circuit Court of

Australia. Both of these courts can hear matters associated with personal insolvency.

Credit le

A le kept by a credit reporting agency that shows a person’s credit history. Lenders access the information in the

person’s le to help them decide whether to lend money. They can also record a default on the person’s le if loan

repayments are made late, or a utility bill is not paid. Every time a person makes an application for nance an entity is

recorded on the relevant le showing the lender applied to, the type of nance, the amount and the date.

Credit reference report

A report that details a person’s credit history, including every time a credit application is made or a default occurs on a

repayment. It is held by a credit reporting agency and a lender must ask the person for permission to get this report.

Credit reporting agency

An organisation that collects and sells credit information on individuals and companies.

Creditor

A person or company to whom money is owed.

Creditor’s petition

An application from a creditor to a court seeking to make a debtor involuntarily bankrupt (see sequestration order).

Debt agreement

An arrangement between a person who cannot pay their debts and their creditors. It is a formal arrangement under Part

IX of the Bankruptcy Act. A debt agreement results from creditors voting to accept a proposal from a debtor to settle

their debts. To be eligible to propose a debt agreement, a debtor must be insolvent and meet threshold levels relating to

unsecured debts and assets and after-tax income.

Debt agreement administrator

An eligible person nominated by a debtor to handle a debt agreement on their behalf.

Debt agreement proposal (DAP)

A proposal to enter into a debt agreement. This proposal is put to creditors to vote upon.

Debt agreement proposal lodgment fee

The fee payable when a debtor lodges a DAP.

Debtor

A person who owes money to a creditor.

Debtor’s petition

An application made to AFSA to become a bankrupt.

Debts not extinguished by bankruptcy

These are debts that a bankrupt is still liable to pay after discharge from bankruptcy. The debts may or may not be

provable – that is:

•

some are provable and not extinguished: eg child support debts

• some are not provable and not extinguished: eg HECS/HELP and SFSS debts; ﬁnes or penalties imposed by a court.

Provable debts that were incurred by fraud are not extinguished.

Debt purchaser

An entity that buys debts from a creditor (for less than their face value) and tries to recover the full amount.

Declaration of intention to present a debtor’s petition (DOI)

A device whereby a debtor may seek temporary relief from recovery action taken by a creditor. Once such a declaration is

accepted by AFSA, it prevents unsecured creditors from enforcing their debts for a period of 30 days.

Discharge from bankruptcy

The end of bankruptcy. The date of discharge is the day after bankruptcy ends. The statutory period of bankruptcy is

three years and one day from when a person les their statement of aairs with the Ocial Receiver, but this period

can be extended in certain circumstances (see objections to discharge from bankruptcy). A bankrupt will never be

discharged if they have not led their statement of aairs with the Ocial Receiver.

Discharged bankrupt

A person whose period of bankruptcy has ended.

Divisible assets or divisible property

Assets/property that can legally be sold in bankruptcy by the trustee.

Page 27 of 30

Exempt assets

Assets/property which cannot be sold in bankruptcy by the trustee. These are identied in s116 of the Bankruptcy Act.

Extension of bankruptcy

See objection to discharge from bankruptcy.

Final judgment

A judgment which nally determines the issues between the parties in a proceeding. A bankruptcy notice must be

founded on a ‘nal judgment order’.

Financial counsellor

A person who gives condential and independent assistance to people with nancial problems. Financial counselling

services are usually provided by community or welfare organisations and are provided free of charge.

Garnishee

An automatic deduction arranged without a person’s consent (generally from their income or bank account) due to non

payment of a debt. A trustee in bankruptcy can garnishee income or monies held by third parties on behalf of a bankrupt,

where the bankrupt has been assessed as liable to pay a sum of money from their income as a contribution to their

bankrupt estate and fail to make payments.

Hardship

With reference to s139T of the Bankruptcy Act, if a person has been assessed as having an income contribution liability

and is unable to pay for a certain reason (from an exhaustive list), the liability can be reduced by the trustee. The list of

acceptable reasons is as follows:

1. the bankrupt or a dependant of theirs suers from illness/disability and there are ongoing medical costs

2. child care costs when the bankrupt relies on this child care to continue their employment

3. rent costs (other than for government-provided accommodation) where the bankrupt must pay them wholly or

substantially from his or her income

4. substantial costs incurred in travelling to or from work

5. somebody who lives with the bankrupt and usually paid for household expenses is no longer able to contribute to

these expenses due to unemployment, illness or injury

6. any other reasons prescribed in the Bankruptcy Regulations (none currently prescribed).

Household property

Items that a bankrupt is able to retain when they become a bankrupt. A list of items can be found in Bankruptcy

Regulation 6.03.

Income for contributions purposes

This is the income of the bankrupt that is used for assessing their contributions liability. It is not necessarily the same as

the bankrupt’s taxable income for taxation purposes, as certain amounts are specically included in, or excluded from,

income for bankruptcy purposes – see section 139L of the Bankruptcy Act.

Index search agent (ISA)

A licensed information broker who can electronically access the National Personal Insolvency Index and provide a search

service to clients for a fee.

Indexed amounts

These are amounts that are periodically adjusted in accordance with the consumer price index. Some are adjusted every

quarter, others every six months. As an example they identify the value of assets that can be retained by a bankrupt or

the income a bankrupt can earn before they are required by law to contribute towards their bankruptcy.

Infringement notice

A statutory demand for payment of a ne issued due to contravention of legislation. This is a general term that can apply

to various agencies/bodies (eg issued by police, the ACCC, courts). In relation to the Bankruptcy Act, infringement

notices may be issued (by AFSA’s Regulation & Enforcement business line on behalf of the Inspector-General) in respect

of certain oences against the Act.

Insolvent

A person is considered to be insolvent when they are unable to pay their debts as and when they fall due.

Page 28 of 30

Inspector-General in Bankruptcy (IG)

An oce created under the Bankruptcy Act 1966 to be responsible for the general administration of the Bankruptcy Act

and to have the powers to regulate bankruptcy trustees and debt agreement administrators, review decisions of trustees

and investigate allegations of oences under the Act.

Interest charge

The interest earned on funds held by registered trustees and debt agreement administrators is paid to the

Commonwealth, and used to fund the cost of conducting enquiries in certain bankruptcies, investigating alleged

oences, monitoring and regulating trustees and administrators and providing information to a range of clients.

Last day of voting (LDV)

The nal day on which creditors can submit Debt Agreement Proposal (DAP) votes to the Ocial Receiver. When voting

closes, the votes received on or before the LDV are counted so that it can be ascertained whether a majority of creditors

(in dollar value) accept or reject the DAP.

Liability

An obligation or responsibility to do something (such as repay a debt).

Liquidated debts or liquidated damages

These are debts or damages where the amount has been xed. Admitting liability for an amount being claimed as a debt

or damages does not, of itself, necessarily mean that debt or those damages are liquidated.

National Personal Insolvency Index (NPII)

The electronic record of all personal insolvency administrations in Australia which can be accessed by anyone for a

fee. This computerised database contains information on proceedings and administrations under the Bankruptcy Act

1966.

National Service Centre (NSC)

The NSC supports AFSA’s personal insolvency and Personal Property Securities (PPS) businesses and provides both

information and electronic registry services to clients.

Non transitional security interest

A security interest that is not a transitional security interest.

Objection to discharge from bankruptcy

A period of bankruptcy can be extended by a trustee. When this happens, the trustee lodges an objection with the

Ocial Receiver at AFSA. Once it is registered on the National Personal Insolvency Index, it is a valid objection. A

trustee can lodge an objection if a bankrupt fails to cooperate, or fails to meet the requirements of the Bankruptcy Act. In

this instance, a bankruptcy can be extended to a ve or eight year period from the date the bankrupt les their statement

of aairs with AFSA through the Ocial Receiver. In certain circumstances, where a bankrupt has left Australia, the

period of bankruptcy does not commence until the bankrupt returns.

Ocial Receiver (OR)

An oce created under the Bankruptcy Act to carry out statutory functions under that Act, including maintaining the

NPII, providing registry services in relation to personal insolvency, and assisting trustees to perform their functions

though the issue of statutory notices. The Ocial Receiver is represented by sta from the Australian Financial Security

Authority (AFSA).

Ocial Receiver notice

A notice issued by the Ocial Receiver, upon application by a trustee, to bankrupts, debtors or third parties requiring

them to provide information, attend to give information under oath, give access to premises, deliver assets or make

contribution payments, to better assist in the administration of a bankrupt estate.

Ocial Trustee in Bankruptcy (OT)

The Ocial Trustee in Bankruptcy, a body corporate, administers bankruptcies and other personal insolvency

arrangements when a registered trustee or other administrator is not appointed. The Ocial Trustee also has

responsibility under the Proceeds of Crime Act 2002 and the Customs Act 1901 to control and deal with property under

court orders made under these statutes. The Ocial Trustee is represented by sta from the Australian Financial

Security Authority, or AFSA.

Overseas travel application fee

A fee payable by a bankrupt when requesting the Ocial Trustee to grant consent to travel overseas.

Page 29 of 30

Personal insolvency agreement (PIA)

Under Part X of the Bankruptcy Act, a personal insolvency agreement results from creditors accepting a debtor’s

proposal to settle his or her debts. Unlike debt agreements, personal insolvency agreements are not subject to income,

asset or debt thresholds.

Prescribed information

This is information that MUST be read by a debtor before making an application for bankruptcy or submitting a proposal

to AFSA for a debt agreement under the Bankruptcy Act.

Private bankruptcy trustee

See registered trustee.

Proof of debt (POD)

A trustee will request lodgment of a POD where there are funds in the estate to distribute.

A dividend will only be paid to those creditors whose proof of debt has been admitted by the trustee.

Provable debt

A debt covered by bankruptcy. This is an amount that a creditor is entitled to claim for in a bankruptcy. If it is accepted

by the trustee the creditor will participate in any distribution that may arise by way of a dividend.

Proxy

A written appointment (Form 7) given by a creditor to another person, the proxy (not being the creditor). If this is

provided to the trustee before or at a meeting the proxy may attend the meeting and vote in place of the creditor.

Attendance can be in person or by telephone.

Real estate

Realty including vacant land, houses, units or commercial properties in Australia and overseas. Time shares are

excluded.

Realisation

Any income raised in an administration under the Bankruptcy Act.

Realisations charge

A levy on the money received by trustees and administrators in bankruptcies, debt agreements, compositions and

personal insolvency agreements, used to fund the cost of conducting enquiries in certain bankruptcies, investigating

alleged oences, monitoring and regulating trustees and administrators and providing information to a range of clients.

Registered debt agreement administrator (RDAA)

A debt agreement administrator who is registered with AFSA by the Inspector-General. A person must not administer

more than ve debt agreements at any one time unless they are registered.

Registered trustee

A person registered with AFSA on the National Personal Insolvency Index (NPII) and registered to administer

bankruptcies, personal insolvency agreements and debt agreements under Part X of the Bankruptcy Act.

Related creditor

A creditor who is a related entity.

Related entity

A related entity includes:

(a) a relative of the person;

(b) a body corporate of which the person, or a relative of the person, is a director;

(d) a director, or a relative of a director, of a body corporate referred to in paragraph (b) or (c);

(e) a beneciary under a trust of which the person, or a relative of the person, is a trustee;

(f) a relative of such a beneciary;

(g) a relative of the spouse, or de facto partner, of such a beneciary;

(h) a trustee of a trust under which the person, or a relative of the person, is a beneciary;

(i) a member of a partnership of which the person, or a relative of the person, is a member;

A relative means:

(a) the spouse of the person; or

(b) a parent or remoter lineal ancestor of the person or of the person’s spouse; or

(d) a brother or sister of the person or of the person’s spouse; or

(e) an uncle, aunt, nephew or niece of the person or of the person’s spouse; or

(f) the spouse of a person specied in paragraph (b), (c), (d) or (e).

Page 30 of 30

Released from debt

At the date of discharge a bankrupt is released from most debts. This means the bankrupt is no longer responsible for or

has to pay those debts. A debtor subject to a Part X agreement is also released from their debts when they meet certain

conditions set down in their agreement with creditors.

Resolution

A resolution passed by a majority in number and value of the creditors present personally, by telephone, by attorney or by

proxy at a meeting of creditors and voting on the resolution.

Revesting

After discharge from bankruptcy and the expiry of certain time periods specied in legislation (which can depend on

when property was disclosed to the trustee and the type of property and whether the trustee has extended the period

by notifying the discharged bankrupt), if the property has not been dealt with by the trustee it becomes the former

bankrupt’s property at law.

Secured creditor

A creditor, whose debt is secured. See secured debt.

Secured debt

A debt that is secured by an interest in property to which the lender may have recourse if the debt is not repaid.

Sequestration order

An order made by the Federal Court or the Federal Circuit Court making a person bankrupt based on a creditor’s petition

or other application as outlined under the Bankruptcy Act.

Solicitor controlling trustee

See controlling trustee.

Special resolution

A resolution passed by a majority in number and at least three-quarters in value of the creditors present personally, by

telephone, by attorney or by proxy at a meeting of creditors and voting on the resolution.

Statement of affairs (SOA)

When a debtor becomes bankrupt or enters into a debt agreement or personal insolvency agreement, he or she must

complete a statement of aairs that truthfully discloses all relevant details about their current nancial position. This

includes details of all debts, as well as details about current and recently owned assets. A debt agreement proposal,

a debtor’s petition, and a Controlling Trustee authority submitted to the Official Receiver must be accompanied by a

statement of aairs. Where a sequestration order is made the bankrupt must le the statement with the Ocial Receiver

and give a copy to the trustee within 14 days of the order being made.

Trustee

See registered trustee and Ocial Trustee.

Undischarged bankrupt

A person who is still operating within the designated period of their bankruptcy, generally a period of three years from

the date they led their Statement of Aairs. They have obligations to full with their trustee and they have various

restrictions upon their conduct. The three-year period can be extended (see objection to discharge from bankruptcy).

Unsecured creditor

A creditor, whose debt is unsecured. See unsecured debt.

Unsecured debt

A debt that is not secured by an interest in property to which the lender may have recourse if the debt is not repaid.

Vest

When something vests in a person, that person becomes the owner at law. A person in whom the property is vested has

the right to possess and control the property including the right to sell it.

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