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Frequently Asked Questions

What Happens If I Have a Self-Managed Super Fund?

Your superannuation that has accumulated over time and is held in an approved fund, is not available for your bankrupt estate – it is protected for your retirement.

However, when you become bankrupt you cannot be the Trustee of your SMSF or director of a trustee company for your SMSF. The legislation gives you 6 months from when you became bankrupt to transfer the funds in your SMSF to an industry fund.

If it is not realistic for you to transfer your superannuation from your SMSF to an industry fund within 6 months, you have the option of proposing a Part 4 Scheme (under the provisions of the bankruptcy act) to the creditors of your bankrupt estate. Typically, in this situation, people propose a monthly payment arrangement over future years. If creditors accept your proposal, your bankruptcy is annulled, you maintain the protection from your creditors that bankruptcy provided you and you are able to continue to be the Trustee of your SMSF and a director of a company.

We are here to help. If you have any questions please give us a call on 1300 764 197 or email hello@understandingbankruptcy.com.au

Further Reading: We recommend our article Bankruptcy and Your Superannuation which can be accessed here and our article Bankruptcy and Part 4 Schemes which can be accessed here

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