Restitution Orders (NSW) Updates
Are Restitution/Compensation Orders Extinguished by Bankruptcy?
The short answer is YES they are, provided the amount payable was fixed prior to the date of bankruptcy and the Order has not been made under proceeds of crime law or in relation to a crime involving fraud.
The Law is different from state to state but the general effect of a Restitution or Compensation Order is to try and recover support payments made to victims of crimes or to make the offender liable to compensate the victim directly.
What debts are Extinguished by my Bankruptcy?
After you are discharged from bankruptcy you are released from most “provable” debts. You are not, however, released from any “non-provable” debts.
A provable debt in the context of bankruptcy is a debt for which a creditor can claim or lodge a proof of debt in the bankrupt estate and receive a proportionate return of any funds realised in the estate by the trustee. Most debts for which a bankrupt is liable will be provable, however, there are a few broad categories of debt that are not provable and some that are provable but not extinguished by bankruptcy.
Will a Finance Company take my Car if I Declare Myself Bankrupt?
This is a question that we get asked quite a lot and the short answer is that
provided you are not in default of the finance contract, they can’t take your car
off you. The bigger issue, however, may be whether your equity in the car exceeds the indexed value of what is protected as a primary means of transport in your bankruptcy. Currently the indexed value is $7,800.
Property used by a bankrupt as a primary means of transport with a value below the prescribed indexed amount is protected in your bankruptcy. As indicated above that value is currently $7,800 but this changes quite often so it pays to check on the Australian Financial Security Authority website www.afsa.gov.au under the tab of indexed amounts.
Can I keep my House if I go Bankrupt?
The short answer is possibly. Equity in real property in which you have a legal or beneficial interest vests in your Trustee in Bankruptcy and your Trustee will look to realise that equity for the benefit of your creditors during the course of your bankruptcy.
A legal interest in property is typically evidenced by registration on the property title either as sole owner or joint owner with one or more other parties. The nature of the title will impact on the extent of the legal interest and legal advice should be sought to the extent that the legal right is uncertain.The legal interest in title to real property would typically vest in the Trustee.