The following is a short list of some of the more important rights of bankrupts.
- Where a trustee objects to a discharge or sets a contribution payable, a bankrupt can write, enclosing appropriate documents, to have the matter reviewed. Decisions are reviewed by the Inspector General (if considered justified) or the Commonwealth Ombudsman. Reviews can also be made to the Administrative Appeals Tribunal (an application fee is payable unless hardship can be proven [Reg 19 of the Regulations to the Administrative Appeals Tribunal Act 1975 (Cth)], and will be refunded if the bankrupt is successful). A bankrupt, creditor or other person affected by an action or omission of the trustee may apply to the court for an order that it thinks just and equitable in the circumstances [Bankruptcy Act 1966 (Cth) s 178].
- Only debts that are legally enforceable against the bankrupt can be proved in bankruptcy. For example, debts that are not enforceable under State laws (for example, statute barred) are not provable debts and, where appropriate, that fact ought to be drawn to the trustee's attention. Most debts become statute barred six years after the date of the last repayment or other acknowledgment of the debt by the debtor. After that time the lender loses the right to sue.
- Bankrupts are automatically discharged after three years and one day unless the trustee files an objection.
- The bankrupt, or his or her estate, has the right to continue any legal or court proceedings begun before the bankruptcy in relation to injury to, or death of the bankrupt, the bankrupt's spouse or a member of the bankrupt's family, or in relation to any compensation or damages received. Any property bought with, or substantially with, those funds is not divisible among the creditors.
- Bankruptcy operates automatically to stop legal or court proceedings (other than those in relation to injury) already begun by the bankrupt. The trustee’s permission is needed to begin or continue with any legal proceedings. The trustee must however, act reasonably at all times and has a duty to consider whether the legal proceedings have merit. A trustee who believes that the action has merit, 'steps into the bankrupt's' shoes and may start or continue the proceedings. This depends on the type of proceedings and advice should be sought from the trustee.
- A bankrupt is entitled to operate a savings bank account.
- A bankrupt has the right to travel freely throughout Australia, although the trustee must be notified of any change in name, address, or employment. This includes simply using a different name or an additional name [s 80].
- A bankrupt can be the executor of a deceased estate and may even apply to be appointed the administrator of an estate if there is no will but in this situation may be required to pay a bond, see obtaining letters of administration. However, property inherited by an undischarged bankrupt will probably be taken by the trustee depending on the type of bequest.
A bankrupt can request from their trustee information that they reasonably require concerning their property or affairs [s 170]. The file will probably contain the trustee's reports, copies of any relevant court transcripts, general correspondence and a list of proofs of debt lodged by creditors. Copies of all relevant documents are obtainable under the Freedom of Information Act 1982 (Cth) although charges were recently introduced under that Act. It may now be preferable simply to seek permission to obtain specific information from the trustee’s file.
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