We have a dedicated bankruptcy team with three registered trustees in excess of 80 years’ combined experience. Our solutions are focused not only on protecting the rights of creditors of your estate, but also on giving you the advice that will turn your life back to one of some financial normality.
After all, bankruptcy is a solution, not a punishment.
Bankruptcy is a process that can help you out of significant debt with creditors that may be out of reach through other avenues. The term of bankruptcy is currently three years, and can be extended by your trustee for a variety of reasons (primarily, non-cooperation with the trustee).
There are two types of bankruptcy: forced and voluntary, and the only difference is in the mode of appointment.
Bankruptcy, Personal Insolvency Agreement or Debt Agreement?
Which is best for your circumstances?
||Personal Insolvency Agreement
||Must have a residential or business connection.||No residential or business connection required.||Must have residential or business connection.|
||While previous insolvency does not be itself make a person ineligible, the Official Receiver may not accept the petition if the debt was previously bankrupt and some other conditions are met.
||Must not have been bankrupt, proposed a Personal Insolvency Agreement or made a Debt Agreement in the previous ten (10) years.||Must not have proposed another Personal Insolvency Agreement in the previous six (6) months.|
||No.||Yes. There are indexed amounts.||No.|
||No.||Yes. There are indexed amounts.||No.|
||No.||Yes. There are indexed amounts.||No.|
Frequently Asked Questions
There are several benefits to entering bankruptcy, assuming your financial circumstances dictate that bankruptcy is inevitable.
Remember bankruptcy is a statutory solution to severe financial stress. Bankruptcy provides protection otherwise not available for individuals subject to debt proceedings.
Some of the benefits of bankruptcy are as follows:
If no other options are available to you, and bankruptcy is inevitable, Shaw Gidley highly recommend that you consider voluntary bankruptcy. The reasons for this recommendation are as follows:
Voluntary bankruptcy requires that you approach a trustee and complete a debtor’s petition and other relevant documentation to be lodged with the Australian Financial Services Authority (AFSA). Once AFSA has process the debtor’s petition and associated documents (two to four business days) you become bankrupt.
The Bankruptcy Act 1966 does not require you to disclose your bankruptcy to your employer.
False. In Australia this is far from the truth; for most people very little changes at all. Normal household effects such as furniture are exempt from bankruptcy. And, each bankrupt can own a vehicle to the current value of $7,900. Plus, if it's under finance and the payout is more than the value then you will be able to keep the vehicle as long as you maintain the finance repayments.
The only things you need to be aware of are the threshold amounts for assets and income.
False. The Trustee in the first instance will give the co owner the opportunity to purchase your share of the property for market value.
False. You are not required to file for bankruptcy just because your spouse needs to. In some cases, where both partners have a large amount of joint and separate debts, it would make sense for both parties to file for the bankruptcy at the same time.
False. This idea emerges from the fact that a bankrupt can not be a company director for the three year term of their bankruptcy, which is true. However, you can still run a business as a sole trader, employ staff, and make money. The Government wants you to start or continue to be self employed as a bankrupt for a multitude of reasons, but primarily because you are contributing to the economy.
There was a time when this was the case but it is not true now. Yes, your bankruptcy will be put onto a Government index online but the only way you can access that information is to pay for it. As a matter of fact, the only people that will ever actually know you're bankrupt are your creditors and the people you tell.
Not necessarily. Many company directors fear that if their company goes into liquidation, they will also be made bankrupt. The personal financial affairs of the director are separate from those of their company and whilst bankruptcy may be inevitable in some cases, it is not automatic and will depend upon the director's own financial position and the extent to which they may have guaranteed any liabilities of their company.
Forced bankruptcy is a result of an agreed creditor making an application to court for an order to make you bankrupt. Usually, you will be in a dispute that the debt’s petitioning creditor has found against you. Alternatively, you may be unaware of the bankruptcy proceedings, or have chosen to ignore them, and the court will make an order by default.
False. Most people who apply for bankruptcy have jobs. In fact, a person who has two dependent children is able to earn over a $1,400 per week (as at February 2015) after tax before any contributions have to be made.
At the same time, there is no benefit to quitting your job because you think it means they will not accept your bankruptcy.
Yes. Any legal action taken by an unsecured creditor prior to bankruptcy including summons, garnishees, recovery action by the Sheriff will stop upon your bankruptcy.
False. Nobody plans for debt to get out of control. Bankruptcy Laws were made because the Government knows that good people can hit bad times. During bad times good people need help.
False. Just because you go bankrupt it doesn't mean you are barred from buying a house ever again. While you will not be able to purchase a house when you are bankrupt, you may purchase assets after discharge.
In fact, by not going bankrupt you will probably never be able to afford to buy a house because you can't save a deposit or afford mortgage payments because of your debt.
Your credit rating is affected by bankruptcy for 5 - 7 years, however, you could use this time to save for a deposit for a house.
False. Bankruptcy freezes debts incurred at the date of your bankruptcy and will clear most debts upon your discharge. In most cases, bankruptcy discharges you from the common debts like credit card debt and tax debts. Debts that are not cleared under a bankruptcy are HECS/HELP debt, debts from fraud, child support or maintenance debt.
It is unusual that someone who declares bankruptcy is denied international travel, however, you do need approval from the Trustee. You simply need to contact your Trustee and provide them with your travel dates, destination(s) and how the trip is being funded. If you travel a lot with your job for example you can apply for an open travel permit so you don't need to ask each time you want to travel.
No. Creditors are prevented from taking action to recover money from you relating to debts incurred prior to your bankruptcy.
An exemption to this is a secured creditor such as a mortgagee or car financier where they hold an asset as a security. You would need to maintain payment of the secured creditors' debts to keep the asset.
Our firm has worked closely with Shaw Gidley Insolvency and Reconstruction. The team at Shaw Gidley are specialist insolvency practitioners and make the confusing process of insolvency easy to understand. The experienced team are honest, professional and are keenly aware of the interests of the relevant stakeholders. Our firm would recommend Shaw Gidley Insolvency and Construction to anyone looking for accurate insolvency advice and practical solutions that you can trust.
Butler Business and Law
In my business relationship with Shaw Gidley, I have always found them to act in their clients best interests and with utmost integrity.....They take the time to evaluate each individual circumstance and get the best result for their clients. Shaw Gidley, through open communication, take the fear and apprehension out of insolvency.
Jeff has been an absolute pleasure to work with. Liquidating a company is an incredibly stressful and emotional process, yet Jeff was supportive and guided me through the process every step of the way. I have no hesitation in recommending Jeff and his team should you ever find yourself in a similar situation. I've come away from the process feeling like I've been well taken care of and confident going forward into this next chapter.
Our firm has had a professional relationship with Jeff Shute and the team at Shaw Gidley for several years now. Throughout this time, we have sought Jeff and the team's knowledge, advice and expertise on a number of matters to help guide our clients through their own at times difficult circumstances.
Jeff and the team have always provided a wealth of professional and technical advice which has been tailored for our clients and designed specifically with the intention of helping to achieve an optimal outcome.
We would have no hesitancy in referring Jeff and the team at Shaw Gidley to anyone whose circumstances require it and look forward to continuing our professional relationship into the future.
I recently had the pleasure of working with Jeff Shute and the team of Shaw Gidley, on a mutual client matter, and I must say, their expertise and professionalism exceeded my expectations. My client was in financial distress and the guidance and advice provided to navigate through difficult times was paramount.
Right from the initial consultation, I was impressed with Jeff's attentive approach and professionalism. Jeff and his team at Shaw Gidley took the time to understand my clients situation and provided the tailored advice to provide the optimal outcome.
Throughout the entire process, Shaw Gidley displayed an outstanding level of knowledge and experience. Their expertise in insolvency, restructuring, and financial management is evident in every step they take. They kept myself and my client informed about the progress regularly and answered all our questions promptly, leaving me with a sense of confidence and reassurance that my client was in capable hands.
In conclusion, I wholeheartedly recommend Shaw Gidley to anyone experiencing financial difficulties. With Shaw Gidley by your side, you can be confident that you are in capable hands.
Having recently worked with the team at Shaw Gidley, I would be happy to recommend their services. Communication throughout the service was fantastic and appreciated their support throughout the process.
Shaw Gidley and their staff are always so informative, supportive and kind in their dealings with me. I have no doubt about their knowledge and experience and they are always so helpful
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