The Law Handbook 2024

378 Section 5: Managing your money • the debtor does not need to apply for a stay of restitution. Other adverse consequences of non-payment Even if the order is not one made under proceeds of crime legislation, check to see if the order has any adverse consequences on non-payment. For example, the order might include a condition that breach of the order results in imprisonment; if so, this condition may apply regardless of whether the debtor has bankrupted. However, note that the court may exercise discretion to stay any legal process against the debtor, including imprisonment for non-payment of a restitution or compensation order (s 60(1) Bankruptcy Act). Restitution and compensation orders and fraud If the restitution order has been made in relation to a fraud, the debt arising under the order might be provable but might not be extinguished after bank­ ruptcy (see ‘Debts resulting from fraud’, above). Joint debts Where a debt is in joint names and one debtor is bankrupt, the non-bankrupt debtor, in almost all cases, continues to be liable for the whole of the debt. (See also ‘Guaranteed debts’, above.) Rent Rent debts are wiped in bankruptcy. However, this does not prevent the landlord from evicting a tenant for non-payment of rent. Office of Housing rent debts A bankrupt who rents from the Office of Housing may continue their tenancy effectively without disruption, subject to approval of the Office of Housing. Therefore, before bankrupting, a debtor should discuss their circumstances with the Office of Housing to confirm what arrangements can be made. Utilities and telecommunications The practices of different companies vary. The law is that bills relating to the period up to the date of bankruptcy are wiped by the bankruptcy, but the bankrupt will still owe bills relating to the use of these services after the date of bankruptcy. After the bankruptcy, utility and telco companies sometimes open a new account and require payment of a security deposit, or restrict the service in some way. Commonwealth Government student loans Commonwealth Government student loans are not provable in bankruptcy (s 82(3AB) Bankruptcy Act). These loans are HELP debts, VETSL debts, student start-up loan debts, ABSTUDY student start-up loan debts and trade support loan debts. They may be recovered during and after bankruptcy. For more information about higher education debts and their effect on bankruptcy, contact AFSA, or the VET Student Loans Ombudsman (see ‘Contacts’ at the end of this chapter) or the ATO’s personal tax information line on 13 28 65. Leaving Australia Surrendering passports Bankrupts must hand their passport to the trustee unless excused by the trustee (s 77(1)(a)(ii) Bankruptcy Act). In general, AFSA, if it is the trustee in the bankruptcy, will not require bankrupts to hand in their passports. Applications for permission to travel overseas Bankrupts must apply in writing to the trustee for permission to travel overseas and pay a fee to make this application. If AFSA is the trustee, it generally considers the following criteria when deciding whether or not to give permission to travel: • Is the travel necessary to earn income? • Does the travel relate to the death or serious illness of a close relative? • Has the bankrupt made arrangements for making compulsory contributions in advance? • Can the bankrupt show that someone else is paying for the travel? • Is there a return ticket?