What happens when my debtor goes bankrupt (a quick review).
Most creditors don’t find out a debtor is bankrupt until way after the event, usually when they ring them to get payment on an invoice. Once a person enters bankruptcy it is important for you to follow some very important steps.
Bankruptcies are managed by the ITSA
(Insolvency & Trustee Service of Australia) and their role is to ensure ny person entering bankruptcy is a legitimate bankrupt.
The ISTA Trustee will investigate the circumstances of bankruptcy to ensure there has been no misconduct with funds, and may recover property or money that the debtor has transferred to someone else. They then sell any assets and the Trustee manages the contributions from the debtor’s income.
The first step is to act fast
The first step is to act fast
- Obtain proof of bankruptcy all bankrupts are given a case number.
- Get the name of their Trustee who is managing their case.
- Then you must provide the Trustee with your proof of debt.
A debt cannot be covered by bankruptcy unless it is provable. As I am writing for the business community the assumption is your debt would be the type accepted such as Trade Services, Business Services, Retail or Hospitality.
Once the Trustee accepts your proof of debt you are entitled to share in any dividend from the administration and to vote at any meetings.
Once a person has filed for bankruptcy you must cease all external recovery action and follow the procedure outlined here. The key is not leaving accounts outstanding too long, follow up quickly on them.
Once the Trustee accepts your proof of debt you are entitled to share in any dividend from the administration and to vote at any meetings.
Once a person has filed for bankruptcy you must cease all external recovery action and follow the procedure outlined here. The key is not leaving accounts outstanding too long, follow up quickly on them.
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