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Life During Bankruptcy - Your Bank Account

Below is information on what you need to know regarding operating your bank account during bankruptcy.

  • You operate your own bank account during bankruptcy without the involvement of your trustee.
  • Your wages are protected and savings from your wages held in your bank account are protected for you.
  • There is no limit on the amount of money you can save in your bank account.
  • You can close and open ordinary bank accounts without the involvement of your trustee.
  • Your savings need to remain in your ordinary bank account and must not be placed in an investment account or IBD.
  • Make sure you cancel all direct debits from your bank account that are no longer relevant. These may relate to creditor repayments or services you no longer require.
  • You can change bank accounts at your discretion. Often, people who have difficulty getting direct debits stopped, will change their bank account to protect their wage for living requirements.
  • You can operate a joint account. You may like to have a joint account with your spouse.
  • You can operate a debit card, linked to your bank account.
  • You can have direct debits on your bank account for payment of regular bills, eg Netflix.
  • Once you are discharged from bankruptcy, your accumulated savings that remain in your ordinary bank account are yours, to spend as you please.

Your trustee operates a separate trust bank account for your bankrupt estate. You are not involved in the operation of the trust bank account.

To get further insight into how bankruptcy works, we recommend our article Getting On With Daily Life which can be accessed here

If you have any questions on bankruptcy or would like to discuss your situation, please give us a call on 1300 764 197 or email: hello@understandingbankruptcy.com.au and we will be happy to answer your questions.