Declaring Bankruptcy – FAQ

When Declaring Bankruptcy – Can I travel overseas?

Yes. All you have to do is apply to your bankruptcy trustee for approval to go. You’ll get it, however there is a one-page form you need to fill in simply to inform the trustee of how long you will be taking a trip, etc. This rule is really only there so high flyers don’t skip the country. Sometimes the trustee will request your passport, but don’t worry about it because you can ask for it back when you want to travel. Call us if you wish to know more about travel on 1300 795 575.

Can I keep my house even when declaring bankruptcy?

In many cases the answer is yes! In fact, in many cases nowadays we can help you keep your home. At Bankruptcy Experts we are professionals at helping people keep their houses. It’s actually very tricky, so if you are concerned about losing your home call us on 1300 795 575 and we will guide you through your options.

The thought of losing the family house is probably the most common deterrent to people declaring bankruptcy. We chat with people daily who have wrestled for years under substantial financial strain so they don’t lose their home.

So how is it possible when declaring bankruptcy and keep your house? Easy, really; it’s a matter of equity. Let’s put it like this, if you own a home that’s worth $350,000 and you owe the bank $350,000 you in reality have no equity in the house, correct? The trustee will only sell your house if there is enough equity in the home if sold to repay a number of your debts. So in this particular scenario, the trustee will then offer you some choices, one of which is to simply to continue paying the mortgage and stay in the house while you are bankrupt.

So how can I learn the value of my home before I go through the process and pain of declaring bankruptcy? A basic way is to go onto and look at the sold houses tab in the Tablelands area and it will show you all the recent sales in your location. Another possibility, if you are not sure or are very apprehensive, is to have a registered valuer do a valuation on your home, not a real estate agent (unless they are registered valuers, naturally). Be warned this will cost you somewhere between $300-700. Just another thing about house prices. If the trustee has to sell your house they do so reasonably quickly. It’s not a 6-month glossy marketing campaign and instead it’s typically by auction and they just meet the market on the day and that’s it. So when thinking about the value remember it’s a sell now price, not when the market improves.

Once you have worked out the market value of your house the next thing to look into is who owns the house.

Generally when our clients are declaring bankruptcy most home loans are between 2 people as joint tenants who both contribute to the home loan. If only one party is declaring bankruptcy then the equity is worked out this way.

Say your house is worth $400,000 and the current market value is $350,000. Then the balance of equity in the home is $50,000, right? Half of that total equity is automatically allocated to the party not declaring bankrupty, leaving $25,000 for the bankrupt. Out of that $25,000 the declaring bankruptcy party has to pay for all of the selling costs including advertising etc., which, depending upon where you live, can cost anywhere between $12,000-20,000. In this particular case say the selling expenses are going to be $15,000 then the remaining left over after the sale is $10,000. So in this case the trustee will give the non declaring bankruptcy party several options. One of which is common is for the bank to say, “Pay us the $10,000 and we won’t sell the house and you will have it eliminated as an asset from the bankrupt’s estate.” Or, in other words, work out a deal to pay the $10,000 and you can keep the house.

Just a side note: the financial institution who has given you the property loan will need the payments to be continued naturally. No matter what the trustee decides, if you don’t pay the financial institution the property loan they will eventually ask you to leave. So, in plain english, keeping your home obviously implies keeping the mortgage as well.

There are many more options with your house when declaring bankruptcy, and we have just outlined one option of potentially 20 alternatives you can decide on, when it comes to your house. We understand you will want to get this right. Gambling with the family home can be a devastating business. If you intend to get the appropriate advice about declaring bankruptcy or you just need to talk to someone give us a call on 1300 795 575.

When would my overseas travel be restricted?

Your travel would be prohibited by the trustee due to legal action. For example, if your declaring bankruptcy is a part of a criminal investigation or fraudulent activities, it’s possible the trustee will restrict your travel.

What happens to my credit rating?

Bankruptcy lasts 3 years and will sit on your credit file for that time. However, as with any default it will appear on your credit file for 7 years. You can have it removed if you get your bankruptcy annulled.

Will I ever have the capacity to borrow money again once I’m bankrupt?

Bankruptcy is for 3 years, and in that time you will not get a loan. After the 3 years is up you will have the ability to get loans; you just won’t get the very best rate. Your credit file will be wiped clean 4 years after you have been discharged as a bankrupt then you will have an ideal credit history again and you will get the most competitive deal on loans.

Will I lose my car when declaring bankruptcy?

Typically no. Bankrupts hardly ever lose their cars because they’ve filed for bankruptcy. Obviously, this is conditional and we can let you know if yours is safe. Call Bankruptcy Experts Tablelands on 1300 795 575.

There is a threshold or amount of wholesale value your car could be worth while you are declaring bankruptcy, which is $7,350. You will find all kinds of erroneous information about this on the internet, but here are the facts. That $7,350 represents not the total value; it represents equity. So, simply put, if you have a car worth $35,000 you are repaying or leasing and the amount you could sell it for is $30,000 then you can keep your car because its equity is only $5,000. The company that lent you the loan for the car will be pleased for you to keep the car even though you are bankrupt as long as you keep up the payments.

What happens to my Centrelink debts if I go bankrupt?

As a general rule we have always told our potential clients not to count on having your Centrelink debt written off when you declare bankruptcy, however it seems more and more this is not the case.

In most cases it has been our experience that Centrelink will not pursue you for your Centrelink debts*(which is also outlined on the Centrelink website – see link below) for the three years you are bankrupt which is good news for those struggling week to week and need to file for bankruptcy to get some financial relief. What seems to be happening more and more lately is that they (Centrelink) may now just simply write the debt off at the end of the three years also. We had a client just the other day send us a Centrelink letter (See below) stating that not only that they wont pursue the debt for the 3 years of bankruptcy but also that they wont chase you for the debt after you have been discharged. In other words you wont ever have to pay back your Centrelink debt if you file for bankruptcy.

What if I’m overdue on my car repayments can I still go bankrupt?

Get some advice on this one. If you are considering declaring bankruptcy and just need some advice today just call 1300 795 575. Basically, you will get about 2 to 3 payments grace when it comes to car loans. The bottom line is simple: whether you are declaring bankruptcy or not, if you miss 3 or more repayments on your loan they will repossess the car. Don’t assume because you are declaring bankruptcy you are automatically going to lose your car because in most cases we help people retain them.

When are the creditors informed of my bankruptcy?

The creditors will be notified when declaring bankruptcy, or the people you owe money to, are notified in writing at about the same time you receive your bankruptcy file number.

Will anyone come to my home?

No. The declaring bankruptcy procedure is basically a paperwork exercise. All that actually occurs is you will either be sent a letter by snail mail or emailed a letter advising you that you are bankrupt. At Bankruptcy Experts Tablelands we make sure that this entire procedure is that simple, so if you have queries about this phone 1300 795 575.

Can I have my bankruptcy annulled?

Yes. This process will take about 2 weeks and will entirely get rid of the bankruptcy from your credit history. There are provisions within the Bankruptcy Act that enable a bankrupt individual to have their bankruptcy annulled through a Section 73 proposal.

The repercussions of creditor’s claims can often result in bankruptcy, regardless of regardless if it was the individual’s choice to enter bankruptcy, or if it was filed by a creditor. Nevertheless, bankruptcy is far from the end of the world for the person who undergoes bankruptcy.

We have been assisting people declaring bankruptcy in the Tablelands area for several years so phone us today on 1300 795 575 to get some insight on this matter. We exercise the most suitable possible strategy for you to get back up and running, eliminating residual effects and hindrances of past financial circumstances to give you the best possible outcome. Having experience and skills specialising in Section 73 proposals, we can combine this with our proven strategies and methods to bring you through bankruptcy unscathed, ready to start over.

Can I get my bankruptcy annulled?

To start with, having your bankruptcy annulled is practically reversing it 100 %. So if you are contemplating you would like to have your bankruptcy annulled there are a few things you have to know.

Firstly, how does the annulment work? A simple way to understand it is let’s say someone owes you $50,000 and they haven’t paid you one cent back for years. Then to make things worse you find out that they are declaring bankruptcy. You would kiss that money goodbye, right? Years pass and they come to you with an offer to pay you $5,000 that their grandparents is offering to them to settle your debt with them. Undoubtedly you are happy to take it, because it is better than nothing. The only condition they ask for in return is that you agree to have the bankruptcy cleaned from their record, and if you don’t agree to do that then there will be no $5,000. Of course you don’t care about their credit file; you are just happy they are offering you some money after all these years.

In bankruptcy terms this technique is usually described as a Section 73 proposal, and it’s an approach where “everybody wins.”.

Essentially the trustee contacts your creditors, presents your offer, which is substantially less than the original debt owed, on the condition they clear your credit file clean.

This process takes a few weeks. The proposal can be done at any time in the 3 years you are bankrupt. However, you have to consider the timing of your proposal, you don’t want to do it the day you are declaring bankruptcy, because it does cost money to do this, you want to ensure the odds are on your side. For example, if you are repaying money to the trustee each week because you earn over the threshold amount, then your creditors will know they are going to receive a certain amount from you over the 3 years anyway so it better be more than that will add up to.

If you have only been bankrupt 3 weeks it will be more difficult to get an annulment because they may get some cash from you over the 3 years if you earn over the threshold sum of money.

If you want assistance to put a section 73 proposal to your trustee or just need more details about the timing of when to put an offer forward, just phone us on 1300 795 575.

Can I still go through the process of declaring bankruptcy if I’m already in a Debt Agreement or Personal Insolvency Agreement or in a Debt Consolidation Loan Contract?

Yes! We can assist you cancel all of these agreements. With Debt Agreements and Personal Insolvency Agreements we will need to have you discharged from them first before you go through the pain of declaring bankruptcy, but it’s no problem. If you are locked into one of these and simply can’t get on top give us call at 1300 795 575.

What debts won’t declaring bankruptcy remove?

There are very few debts that declaring bankruptcy won’t 100 % eliminate, like Centrelink, child support, HECS and a court-imposed fine (speeding fines, etc.) and, finally, money owed to an insurance company as a result of a car accident in an uninsured car that you were driving.

Besides that, it will remove things like your credit cards, store cards, GST and tax, unsecured personal loans, etc. In reality, there are a lot of things to list so if you have a particular debt you are bothered with just call for a free consultation 1300 795 575.

Is there a limit to the amount of debt I can be in prior to declaring bankruptcy?

You can’t file for bankruptcy for an amount under $5,000; however, there is no limit above that. If you owe a couple million dollars, that’s managed no differently than $20,000.

What is the difference between a secured and unsecured loan?

An unsecured creditor is a creditor who does not have a hold over the chattels/assets/property acquired with the credit afforded to you. Such debts include credit card debts.

A secured creditor has a hold over the chattels/assets/property until the debt is paid out in full. If a debtor defaults on a secured debt, the creditor has the right to repossess and sell the chattels/assets/property to pay down the debt.

How can I make sure that you will be successful in making me bankrupt?

We have helped thousands of people go through the process of declaring bankruptcy for many years and we have never had anyone’s application rejected. That’s why we offer a 100 % money back guarantee.

What if I’m not completely sure who I owe money to?

There is a basic method we use here prior to declaring bankruptcy, and all you have to do is get a copy of your credit history as it will have your credit history on there. Companies like will be able to get you a copy for a small fee.

I’ve had a motor vehicle accident. Will the debt be covered in bankruptcy?

Vehicle accidents may be difficult, so to keep it simple call us on 1300 795 575 to get the right advice on your situation, declaring bankruptcy may not be the right option. However, as a general rule, if you were driving a motor vehicle that was not insured then the expense of the repairs is not eliminated with the declaring bankruptcy process. Having said that, it depends who admitted liability or who was at fault. If you go to court and the court confirms you were not at fault then you should be fine.

Can I have business debts removed be declaring bankruptcy also?

Yes! We can help you do this, although it’s possible there are effects and lots of regulations around this process, so phone us and we will direct you through the procedure on 1300 795 575. Bankruptcy Experts Tablelands are experts at assisting businesses get back on their feet.

Can I pay out my bankruptcy debt and have it annulled?

Yes. There is an approach to follow, but if you win lotto or inherit some cash you can use it to get your slate wiped clean. There is a way of doing this properly; just call us first.

What if someone is bankrupting me; is there anything I should do?

Generally, if you owe money to a lender they can get a court order and bankrupt you. They have to follow a process, but it is possible. What you need to avoid at all costs if possible is someone else bankrupting you, as it’s always best to voluntarily file for bankruptcy. Unless you enjoy attending court and annoying phone calls, of course.

What if my company has received a Demand or Wind-Up notice; can I still go bankrupt?

Yes. However, this is a challenging process and we suggest you get some expert advice before declaring bankruptcy; if its handled incorrectly, it could be disastrous. For a free consultation call Bankruptcy Experts Tablelands 1300 795 575.

Do I need to contact my creditors?

No, we do that for you. Actually, we serve as a buffer or a midway point between you and your creditors. So ultimately you are not obligated to notify them of your bankruptcy; we take care of that for you.

How long does bankruptcy last?

Three Years.

How long does it take to declare bankruptcy?

Usually, it takes about 2 weeks.

What if someone else signed for a loan (joint loan or guarantor) and I go bankrupt; will they still be liable for the debt?

Yes. Typically a lender will pursue the other person who signed the loan documents with you for the sum total of the outstanding money owing on the loan.

What happens to a debt I failed to remember at the time of becoming bankrupt?

Don’t panic! If you overlooked a debt and remember it later, just call your trustee with the name of the creditor, address, date the debt was incurred, amount of debt and any account or reference number/s supplied by the lender. Your trustee will add the creditor to your bankruptcy and send a notification to the creditor.

Do I have to go to court if I go bankrupt?

No. We deal with the entire procedure for you.

What if I have gambled a bit of my income and I go bankrupt; will I get in trouble?

Ordinarily this is not a problem, so if you are a gambler, don’t worry. What the trustee doesn’t like is inconsistency here. Put simply, you have never gambled in your life and all of a sudden you lost $50,000 on the horses, then you might have some explaining to do, of course, because it just doesn’t add up.

Can my bankruptcy be done over the phone?

Yes. We appreciate you are busy. If you have a phone we can help you; simply give us a call on 1300 795 575.

What if I’m living in another country; can I still file for bankruptcy?

Yes. This is possible. It requires some emails back and forth but it can be done.

Can I include my overseas debts in my bankruptcy?

Yes. If a person originally living in another country is now residing in Australia then files for bankruptcy and they have a debt incurred in that foreign country, you just list that debt on the paperwork.

In most cases the creditor overseas will wipe out the debt. It is possible and legal for them, however, to reject your application, and if you return to that country you may be subject to their bankruptcy laws.

How will the trustee know what assets I have?

There are a few ways the trustee can learn, and the most effective and simplest way is for you to let them know when we do the paperwork. There is also a government website which has major assets listed also. You ought to get some advice about assets; be careful.

Can I keep an inheritance if I file for bankruptcy?

This is complicated and you will want the right guidance, so if you need more information about inheritances give us a call on 1300 795 575.

Will I lose my Pension or Workers Compensation payments if I go bankrupt?

No. The income thresholds are the same for everyone so no matter how you earn your income you have to earn about $50,000 each year before your income will be affected by bankruptcy.

Will I be able to keep my tax returns once I’m bankrupt?

Yes, if you owe the tax office money. Put simply, if none of your debts is tax debt, then no, the tax office will keep the cash you owe them.

No, if you don’t owe the tax office money when declaring bankruptcy then you should be OK. Your income tax return is viewed as net income, so if you are below the threshold amount you can earn while bankrupt then you will get your entire tax return back.

What about child support?

If you are required to pay child support, this money will be deducted from your net income, so what you have the ability to keep after you pay your tax and then child support is considered net income. That is why when declaring bankruptcy the net income numbers are always quoted.

Can I buy shares and make investments while I’m bankrupt?

Yes, however its not a good idea, you are permitted even while you are declaring bankruptcy, but the trustee will take them off you, as they are deemed an asset.

What assets can I keep if I go bankrupt?

You can keep just about everything when declaring bankruptcy except big things like houses, cars, shares and inheritances. Even things like houses and cars may be able to be saved. Just give us a call before you make any rash decisions on 1300 795 575 for Bankruptcy Experts Tablelands.