When a person is insolvent, he is considered bankrupt. When a person refuses to pay his debts, creditors can declare them bankrupt by means of law. When a person wants to escape debt, he or she can declare bankruptcy on his own. So filing for personal bankruptcy is a law process that allocates the debtor's only property to creditors.
Applying for personal bankruptcy is not only a way for creditors to deal with debtors, but also a legal way for debtors to solve debt problems. In many cases, it is also a good opportunity for debtors to start over.
There are two ways to file for bankruptcy, either by the debtor or by the creditor. Australia's bankruptcy law provides that creditors or debtors can apply to the official receiver's office for bankruptcy as long as the debtor has not less than $5000 in arrears after an court ruling.
Upon receipt of the notice of insolvency, if the debtor refuses or fails to repay the debt, the debtor goes bankrupt. After bankruptcy, all assets of the bankrupt shall be placed under the administration of the bankruptcy trustee appointed by the court. The trustee must sell most of the existing assets of the bankrupt within the scope of law, but cannot sell the instruments on which the bankrupt depends for his survival or work. Assets that cannot be sold include a bankrupt for professional or trading purposes, instruments not exceeding $3700, vehicles with a value not exceeding $7600, supplies for each person, and so on.
The bankrupt will be subject to the following restrictions,
Cannot be a director of a company;
You may not use a business name other than your own name to do business;
No post-bankruptcy debt of more than $5496 may be owed;
The annual salary of an individual above $54081.30 must be distributed by the bankrupt trustee to the debtor, but the maximum annual salary shall vary from the bankrupt's family status to that of the bankrupt;
The bankrupt must hand over his passport to the official trustee, and every exit must be approved by the trustee.
If the bankrupt wants to modify the above restrictions, he or she needs to make an application.
The bankrupt's state of bankruptcy lasted three years. After three years, it is no longer subject to the above restrictions. The previous debt has been written off. It is completely legal, without a burden, and starts again.