30 Apr 2014

Personal Insolvency attracts new Fees


2 min

Insolvents must pay to go bankrupt.

Starting from 1 April 2014 the Federal Government has introduced two more fees into the bankruptcy regime, these are explained below.

Firstly, if a debtor's financial position is such that he or she needs to lodge a debtors petition to make themselves bankrupt, they must now pay a fee of $120 to have the petition processed. That fee can be paid by cheque, money order or by credit card, but if paid by cheque the start of the bankruptcy will be delayed until the cheque is cleared.

It is to be hoped that debtors don’t simply add the $120 fee to an existing unpaid credit card debt, as this will effectively result in banks paying the new fee.

The second fee is for $150 and is payable only when a bankrupt estate is being administered by the Official Trustee and the bankrupt applies for permission to travel overseas.

It should be noted that private trustees cannot charge a fee for the same service when there are no other assets in the estate. This is not an anomaly as the new fee is imposed as a result of a ministerial legislative instrument, which limits the right to charge the fee to the Official Trustee. Private trustees may include the cost of reviewing an application for overseas travel in the fees which they submit for approval to creditors. In such a case the fee might be more or less than the $150 statutory amount but will only be paid if sufficient funds are held in the estate.

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