A debtor can petition for their own bankruptcy. In the alternate, a creditorm ay apply to the Court seeking an order to bankrupt the debtor.
The role of the trustee is to take control of the divisible property available in the bankrupt estate and realise it for the benefit of all creditors. The Trustee’s duties are also to conduct investigations into the examinable affairs of the bankrupt, to establish whether the bankrupt has committed any offences by reference to the Act and to determine whether the bankrupt has entered into transactions that are void as against the Trustee.
The Trustee is also required to assess the bankrupt’s income each year during the bankruptcy to determine whether the bankrupt is required to make compulsory contributions to the bankrupt estate.
All unsecured creditors must stop all recovery actions and should contact the Trustee’s office for their claims to be recorded in the bankruptcy administration.
The bankruptcy will last for three years from the date of lodgement of the bankrupt’s Statement of Affairs, or longer if extended by the Trustee under certain circumstances. After that period the bankrupt is discharged from most debts.