Case Study: The sands of time - bankruptcy and inheritance

The administration of the following bankrupt estate is ongoing and names have been changed to protect privacy.

Sam became bankrupt in January 2019 after his related company was liquidated and the ATO issued a Directors Penalty Notice (DPN) of circa $250K. He voluntarily became bankrupt and before lodging his Debtors Petition, he was advised about the effects of bankruptcy including after acquired assets and in particular the effect of an inheritance. His independently wealthy parents had long separated and after obtaining legal advice his mother chose to change her will.

The bankruptcy was primarily straight forward - two over encumbered properties, a small income contribution assessment and no dividend was expected for creditors. Sam struggled mentally with the demise of his company and his resulting personal financial problems however, over the course of the bankruptcy his mental health improved greatly, and he was looking froward to his discharge in January