PCI knows insolvency – december 2019
Dec 11 2019
It is a common misunderstanding that bankruptcy restricts an individual from travelling overseas during their period of bankruptcy. However, this is not the case. A bankrupt may travel overseas as long as they obtain written permission from their Trustee prior to travel. In addition to seeking permission, there are several other conditions which a bankrupt is required to meet prior to permission being granted.
Ordinarily, a Trustee will require a bankrupt to deliver all passports under their name issued in Australia and any other foreign country. This is one of the safeguards that are in place to prevent unauthorised travel by a bankrupt. A trustee may also request for a Passenger Analysis Clearance and Evacuation System (“PACE”) alert to be placed on the bankrupt with the Australia Federal Police, which will prevent the bankrupt from passing through the border without the Trustee’s approval.
It is important to note that a bankrupt does not require permission to travel within Australia.
The first step a bankrupt must take if they plan to travel overseas is to seek approval in writing from their Trustee. This may simply be organised by the bankrupt completing a form provided by the Trustee or by way of written correspondence detailing the following:
- The bankrupt’s reasons for travel. The reasons do not need to be work-related, e.g. visiting a relative, for a holiday, or for compassionate reasons.
- The name of the country the bankrupt will be travelling to and the dates he or she intends to leave and return to Australia.
- Contact details for the bankrupt while overseas, e.g. email address, phone number and overseas address.
- How the bankrupt’s travel is funded, e.g. money saved while bankrupt or if someone else provided the funds. If it is the latter, the details of that person and a confirmation letter from the person advising same.
- How the bankrupt is planning on satisfying any income contribution obligations while overseas.
In addition to the above, there are several other factors a Trustee may consider prior to granting permission to travel:
- Whether the bankrupt has been compliant with the Trustee’s reasonable request for information and any other instructions to date.
- Any continuing or outstanding legal matters which require the bankrupt’s presence in Australia.
- If the bankrupt is assessed as liable to make periodic income contributions towards their estate, are the payments up to date.
- The Trustee will also consider whether the bankrupt is a flight-risk and if there is any reason to suspect that the bankrupt may not return to Australia.
The bankrupt’s application to travel overseas will not be accepted if the Trustee determines that the bankrupt is not meeting their obligations under the Bankruptcy Act. The Trustee will also provide the bankrupt with reasons as to why their application was declined and this will allow the bankrupt to cooperate with the Trustee in order to amend the decision.
However, in the event the bankrupt considers that the decision made by the Trustee was unfair or biased, they may complain or request a review of the Trustee’s decision by contacting the Australian Financial Security Authority (AFSA) on 1300 364 785.