What is a bankruptcy trustee?
A bankruptcy trustee is a licensed practitioner who is permitted to control the administration of bankruptcies or personal insolvency agreements. Only licensed professionals can render such services.
According to Inspector General Practice Statement 13; Registered trustees are required to maintain the utmost professionalism, independence, impartiality, honesty and ethics in their dealings. They’re essentially officers of the court and, in exercising powers and discretions and making decisions, the same standards expected from a court or judge apply. They play a central role in the administration of estates and are under a general duty to exercise the powers in such a fashion that the objects of the Act, including those of equality between creditors and fairness to bankrupts and debtors are served.
A Registered Bankruptcy Trustee firm vs. a so-called “expert in bankruptcy”
There’s a HUGE difference between a business that charges to help you go bankrupt and a legitimate registered bankruptcy trustee firm.
The guys offering the paid “bankruptcy services” are usually NOT registered bankruptcy trustees. In some cases, they’re not a registered practitioner of any kind. Instead, these largely unrelgulated organisations typically complete and submit your bankruptcy paperwork, for a steep fee.
What they don’t tell you is that you can actually become bankrupt for free. These guys also won’t tell you that a registered bankruptcy trustee firm may even help you for free. At least, that’s what we do.
How to tell if you’re dealing with a real registered bankruptcy trustee and not an impostor?
Here’s a list of do’s and don’ts to help you know exactly who you’re dealing with:
- DO check if the company you’re dealing with is a registered bankruptcy trustee firm. You can do this on the AFSA website. If you’re dealing with a legit trustee – you’ll find the business name and trustee’s name(s) listed. If they’re not listed, they’re not the real McCoy.
- DON’T pay any money upfront for help completing the bankruptcy paperwork. Not only can you file for free but a lot of the businesses offering this service aren’t regulated. Not only are you wasting money, you’re also at risk of receiving dodgy bankruptcy advice! If what they’re saying doesn’t sound right to you, go with your gut – your intuition is probably spot-on.
- DO find out who you’re dealing with and whether they’re qualified. Many organisations who claim to be bankruptcy experts don’t have a registered trustee or a suitably qualified solicitor on staff. What level of expertise can they possibly have on the subject then?
- DON’T be scared to ask if the organisation has a registered bankruptcy trustee on staff. They may not be able to answer the question, or they may tell you they refer matters to an external trustee. If that’s the case, consider walking away and finding a qualified practitioner (like us) or AFSA instead.
The pitfalls of not speaking with a qualified source like a registered bankruptcy trustee
We’ve heard many horror stories about advice received from some so-called “bankruptcy experts”. Also, most of these businesses charge fees from a few hundred dollars up to thousands! To top it all off, the advice rendered to some of the victims we’ve spoken with is woefully inaccurate.
While bankruptcy isn’t the end of the world, it is serious business. Exorbitant fees and amateur advice could leave you high and dry, not only in the short term but the long run too.
Let’s be real, learning about bankruptcy can be pretty confusing at first. You definitely don’t need the added stress of figuring out whether the information you’re getting is even right.
If you’re considering bankruptcy and own property, other unprotected assets or might need to pay contributions from your income, your best bet is to make sure the advice you get is accurate, qualified and regulated.
Will a bankruptcy trustee charge fees?
Bankruptcy trustees do have fees, but you won’t pay them directly unless you’re seeking an annulment (cancellation) of your bankruptcy or you’ve otherwise agreed to pay your trustee a fee up front.
Instead, some of the available funds in your bankrupt estate will ordinarily cover your trustees costs. If you don’t earn enough to pay income contributions or the only assets you own are protected in bankruptcy, your estate won’t contain any money. This means your trustee won’t recover any of their costs. In other words; your trustee won’t be paid.
Talk to a registered bankruptcy trustee firm now
We’re one of Australia’s largest registered trustee firms. We provide free consultations for people considering bankruptcy and we also help people become bankrupt for free.
As a general rule of thumb, we’ll only agree to become your trustee if we believe you’ll need to pay income contributions or own unprotected assets.
If we agree to be your trustee, we’ll consent to act and manage your estate for the next three years. If we can’t agree to act, we’ll still answer any questions that you might have for free. Oh and, we’ll also give you everything you need to become bankrupt for FREE.
If you need some advice or even want to get the ball rolling, get in touch now. You can start a chat, call us on 1300 369 168 or make an online enquiry.