Bankruptcy

Bankruptcy is available to people who are unable to pay their debts, or who are suffering financial hardship.

Bankruptcy is a procedure which provides for:

• A person to be released from his or her provable debts; and
• The appointment of an independent person (the bankruptcy trustee) to arrange for the sale of the person’s divisible property and the payment of funds recovered to the person’s creditors.

The divisible property which will be sold or realised in bankruptcy does not include (subject to certain exceptions), superannuation, tools of trade or a motor vehicle valued at less than the statutory limit, household furniture and belongings and other excluded assets.

A person who is unable to pay their debts may voluntarily file for bankruptcy by filing a Debtor’s Petition with the Official Receiver from the Insolvency & Trustee Service Australia ("ITSA"), which is a Commonwealth Government agency. A person filing for bankruptcy may appoint the Official Trustee from ITSA to act as their trustee, or they may appoint a private trustee, such as those at Pearce & Heers.

Creditors can also apply to Court to make a person who is unable to pay their debts bankrupt if they have a Judgment against the person for over $5,000 and if the person has committed an act of bankruptcy. A creditor who applies to Court in order to bankrupt a person may elect to have the Court appoint a private trustee as trustee of the bankrupt estate or they may arrange for the Court to appoint the Official Trustee.

If you would like to obtain further general information regarding bankruptcy you may wish to view our Bankruptcy FAQs Page.

If you are seeking advice regarding bankruptcy please contact our Brisbane or Gold Coast office and our experienced staff will be able to assist you.