Bankruptcy Bankruptcy

Bankruptcy – can the time period be extended?

Usually the time period for bankruptcy will last for 3 years from the time you submit and file a Statement of Affairs with ITSA.

However, the time period for bankruptcy can be extended to 5 years (ie extended by 2 years) or in extreme cases it can be extended up to 8 years (ie extended by 5 years). Your Bankruptcy Trustee has the right to object to your automatic discharge by filing a report with ITSA.

5 year bankruptcy

Your bankruptcy timer period can be extended up to 5 years, if any of the following have been contravened:

  • when bankrupt, you left Australia without permission by your Trustee;
  • you entered into a transaction prior to bankruptcy which was later declared void by your Trustee (either a preferential payment or a transaction at undervalue);
  • whilst bankrupt you continued to act as a company director;
  • whilst bankrupt you obtained creditor of more than $4,835, without disclosing that you were bankrupt;
  • you failed to attend an examination or interview as directed by your Trustee (without a reasonable explanation);
  • you failed to attend a meeting of your creditors as directed by your Trustee;
  • you failed to disclose an asset or a beneficial interest in an asset;

8 year bankruptcy

Your bankruptcy timer period can be extended up to 8 years (ie extended by 2 years) if any of the following have been contravened:

  • you entered into a transaction which was declared void by your Trustee but was entered into with the intention to defeat creditors;
  • you made an excessive payment into a superannuation fund with the intent to defeat creditors;
  • you failed to provide a written explanation to your Trustee about property, income or expected income;
  • you intentionally provided false or misleading information to your Trustee;
  • you failed to disclose full particulars of income or expected income;
  • you failed to pay compulsory income contributions;
  • if within 5 years of you becoming bankrupt, you did any of the following:
    1. spent money but failed to explain adequately to the trustee the purpose for which the money was spent; or
    2. disposed of property but failed to explain adequately to the trustee why no money was received as a result of the disposal or what the bankrupt did with the money received as a result of the disposal;
  • whilst bankrupt you left Australia and failed to return to Australia when requested to do so by your Trustee;
  • you refused or failed to sign a document after your Trustee requested you to sign the document;
  • you failed to disclose to your Trustee your beneficial interest in any property.

Frequently Asked Questions