Bankruptcy Restrictions And Breach Consequences

Article Summary

An undischarged bankrupt must cooperate with the trustee, disclose property and material changes, keep financial records, report income, obtain written consent before leaving Australia, disclose their bankruptcy when obtaining credit of $7,457 or more, and refrain from managing a corporation. A breach may lead to recovery of property, compulsory examination, an objection extending bankruptcy to five or eight years from the applicable statutory date, or criminal prosecution. The maximum penalties depend on the offence: for example, failure to disclose property under s 265(1) carries up to one year’s imprisonment, obtaining credit without the required disclosure under s 269 carries up to three years, and disposing of property with intent to defraud creditors under s 266 carries up to five years. Prompt correction and full documentary disclosure usually give a solicitor far more room to deal constructively with the trustee than denial or delay.