QLD Bankruptcy - What to Expect?

[Hair&Beauty]

Good Morning,

I signed a 5-year lease in retail 1 year ago, and have now closed the doors. I have been requesting rent relief from the landlord since the beginning of July. I have tried to negotiate with Centre Management and forwarded many emails showing the business accounts to date as to why there is a shortfall every month.

I have never had a reply from the Landlord.

I have now been breached for outstanding rent of 3 months. They have a Bank Guarantee from myself of 3 months rent.

As I can no longer see a way to repay the remaining of the lease which is another 4 years, the business cannot be sold as the fitout is owned by the Landlord. Bankruptcy seems to be only option.

I have never been bankrupt before. Is it for 3 years? Am I still able to travel overseas? Does it apply to all debt in your name including debt in NZ which is a student loan? Car loan? BAS/ Superannuation to employees?

Warm Regards,

 

[Victoria S]

Is it for 3 years?

Yes, generally it's 3 years, during which time you will make contributions from your income if it is over a certain amount. For someone with no dependants its around $991.00 (after tax) per week.

Am I still able to travel overseas?

Yes, but you need the permission of your bankruptcy trustee as they are normally holding your passport.

Does it apply to all debt in your name including debt in NZ which is a student loan? Car loan? BAS/ Superannuation to employees?

It depends.

Foreign (NZ) debts

If you originally resided in another country but are now living in Australia but you have a debt incurred in the other country, you are obliged to list the foreign debt on your statement of affairs in bankruptcy. Foreign creditors have the same rights as Australian creditors.

However, if your foreign creditor chooses not to participate in the Australian bankruptcy and you return to that country, there is nothing stopping the foreign creditor from commencing recovery proceedings or making the person bankrupt again based on that country’s insolvency laws.

Student loans

In Australia government student loans like HECS and HELP are not covered by bankruptcy, meaning they will survive the bankruptcy. I don't know whether NZ student loans would be treated similarly.

Car loans

Generally car loans are secured debts as they are tied to the car and the lender has the right to take possession of it if you don't pay. If that occurs you must cooperate with this recovery action.
You would need to contact your lender to discuss your intentions with the debt.

If you’re unable to maintain the payments, you may be able to surrender the goods. In some cases there is still a shortfall between what you owe and the value of the car. You can list the shortfall in your bankruptcy, and the lender can no longer pursue you for it.

Super payments to employees

Sorry not sure on this one.