Early discharge

People becoming bankrupt on or after 5 May 2003 will no longer be able to apply for an early discharge from bankruptcy. Early discharge is available only for those people who have filed for bankruptcy prior to 5 May 2003.

Any time after six months from the date the statement of affairs was filed, a bankrupt can apply in writing for early discharge. If all the following requirements are met, it is possible to be discharged early from bankruptcy [Bankruptcy Act 1966 ss 149S-149ZE]:

there is no money to pay creditor or the trustee's fees and charges
no compulsory contributions are required
no transactions have been entered which may be avoided (set aside)
the bankrupt has not been bankrupt or entered into a formal scheme or arrangement in the last 10 years
unsecured debts did not exceed 150% of income in the year prior to the bankruptcy
all income, property, debts and creditors were disclosed
not more than $3951 (indexed) credit was obtained without disclosing the bankruptcy
the bankrupt did not continue to manage a company
a passport was surrendered when requested.

Where a bankrupt applies for early discharge the trustee must review the matter to decide if the bankrupt is eligible for early discharge and is not disqualified.

If the bankrupt receives an early discharge the trustee prepares a certificate of discharge for the Official Receiver and provides a copy to the bankrupt [Bankruptcy Act 1966 s 149ZF].

If the bankrupt does not meet the eligibility or disqualifying criteria, the trustee must write to the bankrupt setting out the:

determination of the trustee
evidence upon which the determination was made
reasons for the determination and
bankrupt's right to apply for a review of the trustee's decision [Bankruptcy Act 1966 ss 149ZG-149ZM].

If an objection has been lodged with the Official Receiver by the trustee, the bankrupt may request the Inspector General to review the objection [s 149K] within 60 days of the bankrupt being notified by the trustee of the objection [s 149K(3)], but it is within the discretion of the Inspector General as to whether the circumstances justify a review. The Inspector General must review such a decision if requested to do so by the Ombudsman. Alternatively the bankrupt may apply to the Administrative Appeals Tribunal for a review of the objection [s 149Q].

There is a filing fee of $606 with the Administrative Appeals Tribunal unless hardship can be proven.