Hamilton Murphy

Insolvency & Business Recovery

Our Services

Our Services

Personal Insolvency

Our Personal Insolvency team offers a comprehensive range of services to address the challenges faced by individuals, creditors and organisations. Our experienced team understands that no two situations are the same, and we provide solutions to assist both individuals and creditors in the most challenging financial situations.

We provide advice and solutions to both creditors and individuals and we have a strong track record in assisting our clients in all matters relating to bankruptcy. Bankruptcy is a legal process that provides protection to individuals who are unable to repay their debts or reach a suitable arrangement with their creditors. Once the act of bankruptcy has occurred, there are obligations and restrictions imposed on that individual.

Our Personal Insolvency services include:

Trustee in Bankruptcy

Debtor’s petition
Creditor’s petition
Insolvent deceased estates

Alternatives to Bankruptcy

Informal arrangements
Personal Insolvency Agreements (Part X)

Trustee in Bankruptcy

Bankruptcy is a legal process where a trustee is appointed to administer an insolvent person’s affairs in order to provide a fair distribution of the person’s assets to their creditors. The Bankruptcy Act 1966 is in place to protect debtors (ie. the bankrupt) and any creditors. The debtor is protected from being pursued by any creditors and, with certain limited exceptions, is then released from their debts at the end of the bankruptcy period. The personal bankruptcy regime also protects creditors’ interests by having an independent, qualified accountant control and investigate the bankrupt’s affairs and collect and distribute any personal assets of the bankrupt (subject to certain criteria). Bankruptcy provides a clear path for the debtor to make a fresh start. There were over 16,800 people who went bankrupt in Australia during FY17/18. This was a 3% increase year on year.

Insolvent Deceased Estate

Hamilton Murphy can act as the independent party that conducts the investigations and administers the deceased estate under Part XI of the Bankruptcy Act. We are experienced in enabling the distribution of an insolvent deceased estate’s assets whilst managing any issues which may arise in a sensitive manor.

Creditor’s Petition

If a creditor is unable to recover a debt over $5,000 from an individual through ordinary means, an application can be made to court to declare the individual bankrupt. Creditors can be individual creditors or a group acting as joint creditors. The total amount of the unpaid debt must not be less than $5,000, which could include small creditors acting jointly. Secured creditors cannot present a creditor’s petition, unless to the extent that the amount owed exceeds the relevant security. Alternatively, if the secured creditor surrenders its security to the trustee in bankruptcy, the secured creditor can participate in the joint creditor’s petition.

Composition (Section 73 Proposal)

A proposal pursuant to Section 73 of the Bankruptcy Act 1966 is a formal agreement between a bankrupt, creditors and the Trustee that monitors the agreement. If creditors accept the Section 73 proposal, the bankruptcy is annulled and it is as though the bankruptcy never occurred. Under a Section 73 Proposal, the bankrupt is released from the restrictions of remaining in bankruptcy. They are released from their debts and their property revests in them (unless it is dealt with in the Section 73 Proposal). In return, creditors would expect to be offered a higher return than they would have received in the bankruptcy.

Personal Insolvency Agreements (Part X)

A personal insolvency agreement (also known as Part X) is a formal arrangement for a debtor to deal with their creditors by making a proposal in satisfaction of their debts. This option can be feasible for a debtor that does not meet the eligibility requirements of a debt agreement because their assets and liabilities are considered too great. The arrangement is flexible and the terms may be negotiated between the individual and creditors. This option is an alternative to bankruptcy and can be an appropriate option if professional advice is sought early.

About Bankruptcy

Key aspects of Bankruptcy

  • Bankruptcy term of 3 years
  • Loss of divisible assets
  • Disqualification to act as a Director during the bankruptcy period
  • Credit rating is affected
  • Limitations on overseas travel
  • Various exceptions to common assets

Causes of Bankruptcy

  • A situation where an individual is unable to pay all their debts
  • A situation where an individual receives letters of demand, writs and/or bankruptcy notices from creditors, debt collectors or solicitors
  • An individual chooses to make themselves bankrupt with debts of at least $5,000
  • A creditor applies to the court to make an individual bankrupt if they can prove that the individual has at least $5,000 in debt and that a bankruptcy notice has expired
  • When a creditor is experiencing non-payment of a debt, dishonoured cheques or payments, trading terms extended or not met by the individual
  • An individual’s personal guarantees provided for company debts are called up

Outcomes of Bankruptcy

  • A Registered Trustee is appointed and manages your bankruptcy
  • The Trustee recovers and sells your assets for the benefit of the creditors and investigates your financial affairs
  • Relief is provided to the individual in bankruptcy from debt problems and extinguishes existing debts
  • Relief from creditor demands
  • The ability for the individual to start life afresh after bankruptcy, being free from debt

Benefits of Bankruptcy

  • A Registered Trustee is appointed and manages your bankruptcy
  • Consolidates financial debts
  • Relief from creditor demands for payment of debts
  • The ability for the individual to start life afresh after bankruptcy, being free from debt