Personal Bankruptcy (Debtor) - Voluntary Debtor's Petition (Self-Bankruptcy)

When does a voluntary bankruptcy end?: A bankrupt on a debtor's petition is discharged automatically 3 years after the date the Official Receiver accepted the petition (s 149(1)(b)). If an objection to discharge takes effect, the bankruptcy runs to 5 or 8 years depending on the ground (s 149A).

What happens to the bankrupt's property and conduct?: Property of the bankrupt vests in the Official Trustee, or in a registered trustee who becomes trustee under s 156A, and after-acquired property vests as soon as it is acquired (s 58(1)). The bankrupt must fully and truly disclose to the trustee all property and its value and any disposition of property in the 2 years before the bankruptcy (s 265(1)), and commits an offence by leaving Australia without the trustee's written consent (s 272(1)(c)).

Jurisdiction: A debtor's petition is presented to the Official Receiver under s 55, not filed in court. Court proceedings in bankruptcy are heard by the Federal Court of Australia or the Federal Circuit and Family Court of Australia (Division 2) (s 27).

The Process at a Glance: Compile the debtor's assets, liabilities, income and recent transactions and prepare the statement of affairs. Consider whether a declaration of intention under s 54A suits the client, noting that presenting one is itself an act of bankruptcy (s 40(1)(da)) and that it cannot be presented after a creditor's petition is served (s 54B(b)). Review and sign off the statement of affairs, present the petition to the Official Receiver and confirm acceptance. Notify creditors and advise the client on duties and restrictions during bankruptcy.

Key Legislation: Bankruptcy Act 1966 (Cth) ss 27, 40(1)(da), 54A, 54B, 55, 58, 116, 149, 149A, 265 and 272.

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