How Will Declaring Bankruptcy Affect My Family?

The bankruptcy process entails many ramifications that may have a flow-on effect to other family members. When you declare yourself bankrupt, the bankruptcy does not automatically extend to your family unless a family member has guaranteed your debts.

Assets
When you declare bankruptcy, your assets may be taken and sold to help clear your debts. This may include your house, car, and other valuable items. Your car will not be sold if it is worth less than . If you own your house or any assets jointly with family members, the trustee in bankruptcy will need to negotiate with the other co-owner to realise the bankrupt’s share.

Running a business
If you run a business the impact on it will depend on how the business is structured. For example, if you are a sole trader then the trustee may allow you to continue to trade the business as long as you declare the income your earnings from the business. If the business is owned by a Pty Limited company, then it will depend on who owns the shares in the business. If you own the shares, then the trustee in bankruptcy will need to sell them. Furthermore, you will not be able to act as a director of the company whilst bankrupt.

Travelling as a Family
When you declare bankruptcy, you cannot travel overseas without permission from your bankruptcy trustee. If you and your family like to travel overseas together, bankruptcy could potentially disallow this, however, in most cases your trustee should allow you to travel if you have complied with all obligations as a bankrupt.

Declaring bankruptcy can in some cases be difficult. Our team at Australian Bankruptcy Services is here to help you understand the effects it may have on you and your loved ones. We have expert Bankruptcy advisors who can offer you FREE and professional bankruptcy advice tailored to you. Call us now on our toll-free bankruptcy hotline. We are available 24/7 including weekends.