When can you be made a bankrupt?
When the amount of money you owe reaches an excess of $10,000 and you are unable to pay up. When this happens, a bankruptcy application can be made against you to the court. If the amount you owe in debt is below $100,000, you will be referred instead to the Insolvency and Public Trustee’s Office. There, you will be assessed and if eligible, you will be put under the Debt Repayment Scheme (DRS).
What happens when you are officially declared a bankrupt?
The Official Assignee (OA), which refers to the person in-charge of administering a debtor’s bankruptcy affairs, will begin by taking stock of all your assets that you have in your possession. Your assets will be sold off so as to pay your debt.
If you do still continue to have income while you are a bankrupt, you are required to declare and disclose it to the OA. A portion of your income will be channelled into the bankruptcy estate and will be used to pay off your debts.
Needless to say, bankruptcy is something you would really want to avoid at all cost, because it can change your life drastically and may even affect your friendships and kinships. Bankruptcy can cause you many unwanted worries and may even affect your career.
Restrictions during Bankruptcy:
• You will not be allowed to leave the country unless otherwise approved by the OA.
• If you are currently a public servant, you will not be allowed to continue. You will also not be allowed to take up public office.
• You will be relinquished of any company director position unless otherwised approved by the OA or the Court.
• You cannot sue any persons in court without seeking the OA’s permission (unless it is an action for personal injury).