Bankruptcy is a legal process where a bankruptcy trustee is appointed to administer an insolvent person’s affairs, in order to provide for a fair distribution of that person’s divisible assets to their creditors.
Why choose bankruptcy?
The Bankruptcy Act 1966 exists to protect debtors (i.e. the bankrupt) and creditors.
The debtor is protected from being pursued by creditors and, with limited exceptions, is released from their debts upon their discharge from bankruptcy. Bankruptcy aims to provides a debtor with a fresh start.
Bankruptcy protects creditors’ interests by having an independent, qualified professional control and investigate the bankrupt’s affairs and collect and distribute the bankrupt’s divisible assets.