Arthur Carney, our insolvency specialist, weighed in on the new development today in a brief discussion with journalist from the Guardian.
Below are some of the comments touched on by Arthur Carney, Partner.
Once bankruptcy is declared, the trustee effectively steps into the bankrupt person’s shoes and assumes control of their estate and assets.
“Their job is to administer her assets, call them in, and satisfy the creditors.”
This process can include selling property held in the bankrupt’s name, investigating funds held in trust or overseas, and potentially garnishing future earnings.
He said the trustee would be particularly interested in what had happened to Brittany Higgins’ $2.4 million Commonwealth compensation payout.
“The trustee would have to investigate what she did with the money.”
If the funds were legitimately spent on ordinary expenses, such as travel, legal fees, or personal events, those amounts cannot be recovered. However, the trustee would still examine whether any assets, shares, or trust interests exist that could be liquidated to satisfy creditors.
There are also significant reputational and practical consequences of bankruptcy, beyond the financial impact.
“You can’t hold a credit card, you can’t obtain credit of any kind, you can’t travel overseas without the permission of your trustee.”
Bankruptcy typically lasts five years, after which remaining debts are discharged, though early release may be possible if the debts are paid sooner.