Bankruptcy And Centrelink

Will Bankruptcy Stop Me From Receiving Centrelink Benefits?

Will Bankruptcy Stop Me From Receiving Centrelink Benefits?

No, your relationship with Centrelink will not be impacted by you declaring bankruptcy. You remain able to seek and receive support from Centrelink.

Monies you owe Centrelink are a provable debt in your bankruptcy provided Centrelink does not consider the debt to have been created by fraud. So if you are concerned about if I go bankrupt what happens to my wages from Centrelink you don’t need to be unless, Centrelink believes that you have deliberately withheld information or provided false or misleading information, then they will continue to persue you for the money as they will not be able to prove a provable debt in your bankruptcy for recovery of those monies.

It is important that you provide accurate and truthful information when dealing with Centrelink as it could impact on your eligibility for benefits in future. In some cases, Centrelink may also be able to recover funds you owe them from your assets. This is usually done if the debt was created by fraud or negligence on your part and must be approved by the court. If you are bankrupt, it is important that you keep Centrelink informed of any changes in your circumstances and continue to make all required repayments as directed. 

You should also ensure that any documents requested by Centrelink are submitted promptly and accurately. Centrelink may also contact you post-bankruptcy in relation to any debt that is not included in your bankruptcy. You should be able to negotiate a repayment plan for this debt with Centrelink, if they decide to pursue it. You should always seek advice from an accountant or insolvency specialists before making an arrangement with Centrelink. It is important that you understand the implications of entering into such an arrangement and make sure that you can keep up the payments as required by the agreement.

If you would like to have a chat about or seek more information about what happens if you are declared bankrupt, employment restrictions for bankrupts or how much you can earn when bankruptcy please call me on 1300 794 492 or email hello@understandingbankruptcy.com.au.

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