1 year Bankruptcy… Has it changed from 3 years to 12 months?
The Australian government has been looking at changing the bankruptcy duration from 3 years to 1 year for several years now…
We keep getting asked is it ever going to happen?
Well, for the first time in a long time it looks like it is… And, the good news is that they will make it retrospective.. meaning that anyone who has declared bankruptcy before the bill is passed will still benefit from it.
When it was first raised some years ago it was placed on the back burner and the amendment bill never really got any traction… Why you ask? Well probably because no politicians directly benefited from it so it wasn’t made a priority.
Now in the midst of an economic downturn and the potential for bankruptcies to rise dramatically, it is now on the agenda. Why? Because it’s now important for Australians so it’s important for the politicians to get votes.
Now there are a lot of debt negotiation companies who aren’t happy about this as it won’t make part ix and debt agreements nearly as feasible for clients, however it’s not about them making money it’s about how you can benefit from this change.
What exactly is changing for bankruptcy?
So there are a few fundamentals changing, however a few things are staying the same. As will all bankruptcies if you stick to your obligations you have nothing to worry about, however if you don’t the trustee still will have powers to extend the bankruptcy period out. So it’s imperative to always get the best advice, complete our FREE BANKRUPTCY EVALUATION BELOW:
AFSA is keeping it tight lipped and refer you to the parliament of Australia, however it’s never been more important for this bill to pass. You can read the very little information the govt makes public here. There’s a number of reasons they are considering changing bankruptcy from 3 years to 1 year.
So the main changes that benefit the individual is the following:
- They have shortened the default bankruptcy period from 3 years to 1 year
- This means that after the 1 year your bankruptcy will be discharged
- After the 12 months you can become a director of a company and trustee of a trust again
- this is a full 2 years before you could do so previously
- You are able to travel overseas without permission from the trustee
- You can apply for credit and don’t have to disclose you have been declared bankrupt
The other obligations are unchanged, however it allows you to get back to normality much sooner than previous with current bankruptcy duration.
So if you’ve been asking yourself:
Bankruptcy – What should I do?
Well the first thing to do is determine your suitability by completing our FREE BANKRUPTCY SCORE CARD HERE.
If you aren’t ready for that then check out our home page by CLICKING HERE, we have our whiteboard ex plainer video here and along with a log of relevant bankruptcy / insolvency information.
Just remember, bankruptcy isn’t for everyone. however, if you need to run the figures for yourself check out our detailed post SHOULD I APPLY FOR BANKRUPTCY – CLICK HERE.
Between those three resources and this post you should be able to cover off on most avenues of questions.
The Bankruptcy Team is here to answer any and all question about how bankruptcy works and if it’s suitable for you – there has never been a better time to look into bankruptcy to free yourself of debt and get a debt-free fresh start.
1 year of your life is nothing – some of our clients have freed up to $40 – $50 – $100k+ of debts. You financial wellbeing matters to us, don’t keep living under a grey cloud. We only have 1 life and it’s too short to be worried about:
- Debt collectors calling and harassing us
- feeling of dread when payment time comes around
- getting charged more interest than the debt
- feeling helpless and not being able to look after the family financially
We treat everyone with respect and completely confidential.