So Bankruptcy lasts 3 years right?

Not for one unlucky guy, who did everything right (or at least that’s what everyone thought).

Ken knew he was about to be made bankrupt in court in September 2016, so he took it upon himself to fill out his statement of affairs (“SOA”) and sign it a few days before he was made bankrupt.

The SOA is the document that kick starts the 3 years and 1 day bankruptcy period.

Once he knew, he gave his SOA to his Trustee to promptly submit same to Australian Financial Security Authority (AFSA).

AFSA rejected the SOA telling Ken it couldn’t be dated pre-bankruptcy.

Ken re-submits by post a newly dated form, bypassing the Trustee, directly to AFSA (but they never receive it).

… 3 years pass.

Ken’s finally told in July 2019.

He has to apply to court seeking a backdating of the 3 year period to Sept 2016.

Court (without reasons) declares that the relevant date that the SOA was filed is November 2016.

Some big lessons:

  1.  Don’t be too over-eager and pre-date your SOA
  2.  Give your SOA to your trustee to submit!
  3.  Ask your trustee every 6 months if there are any issues with you being discharged after 3 years I’m not entirely sure how it wasn’t picked up for 3 years, but it’s a timely warning 

Cole v AFSA [2019] FCA 1676

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