Legal support for trustees in bankruptcy
We take the contested parts of the estate off your desk, from clawing back transfers to defending your income assessment.A bankrupt estate differs from a corporate one in a way that shapes the whole administration, which is that the debtor is still there. They are living in the house you are assessing, earning the income you are contributing against, and frequently being advised by somebody on how to make your job harder. The straightforward parts of the role are volume work. What consumes an administration is the contested end of it, resisted by a person with every reason to resist. Those pieces sit in the Bankruptcy Act 1966 (Cth) (the Act): transfers made before the bankruptcy, income contribution assessments, proofs you are minded to reject, and objections to discharge.
Transfers chased while provable
A transfer made before bankruptcy is easiest to recover early, and each category under the Act carries its own time limit.
Assessments that survive review
An income contribution built on evidence rather than the declared figure holds up when the bankrupt takes it further.
A shorter list of things to do
Knowing which recoveries are not worth funding protects the estate as much as the ones that are.
Where does a bankrupt estate actually get difficult?
Most of a trustee’s obligations are administrative. Identify divisible property, realise it, adjudicate proofs, assess income contributions, report to AFSA. The difficulty concentrates in a few places instead of spreading evenly. Property transferred to a spouse or a family trust before bankruptcy can be recovered under the Act, but each category of transfer carries its own test and its own time limit. Income contribution assessments are disputed often, because the declared income and the actual income are rarely the same figure. And an objection to discharge has to be grounded properly or the bankrupt will simply have it overturned.
What property can I realise?
Everything divisible, which is the bankrupt’s property other than what the Act exempts. Superannuation, ordinary household goods, tools of trade up to a limit and a vehicle up to a set value stay with them. Property genuinely held on trust for someone else is not available either. Beyond that, property transferred before the bankruptcy may still be recoverable.
How far back can I chase a transfer?
It depends which provision the transfer falls under. Transfers made to defeat creditors, undervalued transfers and preferences each have their own test and their own look-back period, and a related party attracts a longer one. The practical constraint is usually evidence rather than the period itself, which is why early investigation matters.
The bankrupt disputes the income contribution assessment. What now?
There is a review process and, if that does not resolve it, a court. An assessment based on the declared figure alone is the one most likely to fail, so the defence is built when the assessment is made rather than when it is challenged. We can review the income evidence before the assessment is issued.
When is an objection to discharge worth lodging?
When there is a ground that will hold, and the extension actually serves the estate. An objection lodged on a weak ground gets overturned, the bankruptcy ends on schedule, and the estate has paid for the exercise. We can assess the grounds available and whether the extension is worth pursuing.
The issues in an estate surface in the first few weeks
If the statement of affairs is not matching what you are finding, that is the moment to get advice. Transfers worth recovering are easiest to prove while the paper trail is fresh, and the time limits in the Act do not wait for an administration to settle down.
The bankrupt is still living in the estate you are administering
You have an estate where the interesting property left before you arrived, the declared income does not match the lifestyle, and there are creditors watching closely enough to ask why more has not been recovered. Each of those is a legal question with a time limit attached, and none of them can be resolved by administration alone. Meanwhile every decision you make is open to challenge by the bankrupt, by creditors, and by the regulator.
- We will advise on your obligations and on the decisions most likely to be challenged.
- We will investigate transfers made before the bankruptcy and run recovery proceedings where they are worth funding.
- We will build income contribution assessments that survive review, and defend them if the bankrupt disputes.
- We will advise on proofs of debt and on the grounds for any objection to discharge.
- We will manage your AFSA reporting and respond to creditor and regulator enquiries.
The statement of affairs does not match what you are finding
You accepted the appointment and the early investigation has raised things. The family home went into a spouse’s name eighteen months before the filing. The income declared sits well below what the bank statements suggest is coming in. Two substantial creditors have engaged lawyers and are asking, politely so far, what you intend to do about both. The bankrupt has stopped returning your calls. What you need is advice on which of these is recoverable, which is not worth the estate’s money, and how long you have to decide.
What's included in your trustee in bankruptcy legal support service
- Review of the estate against the statement of affairs, with a recovery shortlist.
- Voidable transfer investigation and recovery proceedings.
- Income contribution assessment and dispute representation.
- Proof of debt adjudication advice and objection to discharge grounds.
- AFSA reporting and regulator liaison.
What an unrecovered transfer costs you
The exposures in a bankrupt estate run in both directions. Reject a proof of debt without the material to support it and the creditor applies to the court to review your decision. Fail to investigate a transfer that was recoverable and creditors have a complaint that you did not discharge your duty to them.
Income contribution assessments generate the most litigation because they are the most personal. A bankrupt who disputes one has a review path and then a court, and an assessment built on incomplete income evidence rarely survives either. Objections to discharge create the same problem from the other end: an objection lodged on a ground that does not hold gets overturned, the bankruptcy ends anyway, and the estate has paid for the argument. All the while the transfers worth chasing get harder to prove, and the limitation periods in the Act do not extend because an administration was busy.
From an estate full of loose ends to a defensible administration
We start by reading the estate rather than the file. What the statement of affairs says against what the records show, which transfers fall inside a recovery provision and which are merely irritating, what the income evidence will actually support, and which creditors are likely to become a problem. That produces a short list of things worth doing and a longer list of things worth not doing, and the second list usually saves the estate more than the first one makes.
Then we take the contested work. Recovery proceedings against transfers made before the bankruptcy. Income contribution assessments built to survive a review. Adjudication advice on the proofs where a rejection is likely to be tested. Objections to discharge grounded so that they hold. And when the bankrupt or a creditor challenges something you have done, we respond to it, so the administration keeps moving while the argument runs alongside.
How we support the administration
From the first reading of the estate through to discharge.Read the estate
We review the statement of affairs against the records, identify the transfers and income questions worth pursuing, and tell you what is not worth the estate's money.
Recover what moved
We run the voidable transfer proceedings that are worth funding and build the income contribution assessments so they hold up under review.
Through to discharge
We advise on proofs, distribution and any objection to discharge, and respond to challenges from the bankrupt or creditors along the way.
Bankruptcy work done by a lawyer formally qualified in insolvency
Administering a bankrupt estate is a strange job. You are making decisions about somebody’s house, income and possessions while they are still living in the middle of them, and very few people in that position stay cooperative for long. Add creditors who want more recovered and a regulator interested in how you went about it, and the role is far more contested than the statutory language makes it sound.
One of our lawyers holds the ARITA Advanced Certificate in Insolvency and is a member of the Australian Restructuring Insolvency and Turnaround Association. We advise trustees on contested voidable transfer proceedings, income contribution disputes and objections to discharge, and we have acted for the creditors petitioning into these estates, which tells us what the pressure on you will look like before it arrives.
Our great lawyer guarantee
Six principles we hold to, whatever you bring us and however long it takes.
Take the time
We listen carefully to understand what you want to achieve, then step you through the advice and the documents.
Share our knowledge
We pass on as much as we can, so you can make your own informed decisions.
Stick to our knitting
We only do what we are good at, so you never pay for our learning.
Work as one team
Someone is always available to answer your question or point you the right way.
Fair pricing
A fixed or capped quote for advice and documents, so you do not carry the price risk.
It is your show
We are in it for a front row seat to witness your success, not for our egos.
Get the contested parts handled
Send us the statement of affairs and whatever your investigation has turned up. We will tell you which transfers are recoverable, what your income evidence will actually support, and what is not worth the estate’s money, then take the contested work from there.
More on this area of law
Read more about bankruptcy administration, voidable transfers and income contributions, and how ADLV Law can help.