Traveling Abroad: Post-Bankruptcy

There are many misconceptions about travelling while bankrupt. Many people believe that declaring bankruptcy means you cannot travel overseas at all during the bankruptcy period. However, this is not true. While there are some restrictions, it is possible to travel abroad after declaring bankruptcy. If you are bankrupt and want to travel overseas, you must request permission from your trustee. This process may include filling out a form, providing details about your trip, and submitting to a review of your bankruptcy matter.

Permission to travel abroad after bankruptcy

If you are bankrupt, you may be permitted to travel abroad, but you will need to request permission from your bankruptcy trustee. This is a common misconception, as many people think that you cannot travel overseas during bankruptcy. However, this is not true, and you can request permission to travel by completing a form and submitting your proposed itinerary for the trustee to review.

Your bankruptcy trustee will need to gather some information from you, including:

• Where you got the money to travel
• Where you are going, when you are leaving, and when you will return
• Your reason for travelling (for work, for compassionate reasons, or for a holiday)

The trustee will take this information into consideration and determine whether or not you are meeting your obligations under the Bankruptcy Act. They will also consider whether there are any outstanding matters that require your presence in the country for their resolution, and whether you have been keeping up with any assessed income contributions. The trustee will also want to ensure that there is no reason to suspect that you will fail to return to the country.

If your request to travel is declined, the trustee must inform you of the reason in writing. You can then work with the trustee to try to reverse the decision, or you can complain or seek a review of the decision if you believe it to be unfair.

It is important to note that travelling without permission from your trustee is an offence under the Bankruptcy Act. This can result in penalties such as an extension of your bankruptcy or a term of imprisonment.

Requesting permission from the trustee

Understanding the Requirements:

Firstly, it's important to understand that seeking permission from your trustee is a legal requirement. The Bankruptcy Act mandates that you must obtain consent from your trustee before travelling overseas. Failure to do so can result in legal consequences, including imprisonment. Therefore, it is essential to take this step seriously and follow the proper procedures.

Communicating Your Travel Plans:

When reaching out to your trustee, it is important to provide clear and detailed information about your travel plans. This includes sharing your reasons for the trip, the countries you plan to visit, the dates of your departure and return, and any other relevant details. It is advisable to communicate your intentions as early as possible to allow ample time for the trustee to review your request.

Completing the Necessary Forms:

To request permission, you will typically need to complete a "Request for Permission to Travel Overseas While Bankrupt" form or a similar document provided by your trustee. This form will require you to disclose various details about your travel plans and financial situation.

Demonstrating Financial Legitimacy:

One of the key considerations for your trustee will be the source of funding for your trip. It is essential to demonstrate that you saved the money while bankrupt or that someone else is funding your travel expenses. Providing evidence of this can help strengthen your case for permission.

Understanding the Trustee's Considerations:

When reviewing your request, the trustee will consider several factors. These include assessing whether you have fulfilled all your obligations under the Bankruptcy Act, determining if your presence is required in the country for any outstanding matters, and evaluating the likelihood of your return to the country. Remember that the trustee's primary concern is to ensure the proper administration of your bankruptcy and protect the interests of your creditors.

Handling a Refusal or Imposed Conditions:

It's important to remember that submitting a request does not guarantee approval. Your trustee may refuse permission or impose certain conditions on your travel. If your request is denied, the trustee is obligated to provide you with the reasons for the refusal in writing. You can then work directly with the trustee to address their concerns or explore avenues for complaint or review, such as contacting the relevant regulatory authorities or seeking legal advice for further options.

Remember, open and transparent communication with your trustee is crucial throughout this process. By providing detailed information and addressing any concerns they may have, you can increase your chances of obtaining permission to travel abroad while bankrupt.

Reasons for refusal of permission

• You haven't fulfilled your obligations under the Bankruptcy Act: If you haven't met your obligations under the Bankruptcy Act, your trustee may refuse to grant you permission to travel abroad. This could include failing to provide all the requested information, not making required income contributions, or not resolving any outstanding matters that require your presence in your home country.
• Assistance with bankruptcy administration: If the trustee requires your assistance in administering the bankruptcy, they may deny your travel request. This could be due to ongoing investigations or the need for your presence to resolve certain matters.
• Failure to obtain written permission: In some countries, such as Australia, leaving the country without the written consent of your trustee is considered an offence under the Bankruptcy Act. This can result in penalties, including imprisonment and an extension of your bankruptcy period upon your return.
• Court approval: In certain jurisdictions, such as Northern Ireland, individuals must apply to the High Court for approval to travel outside of the court's jurisdiction. Failure to obtain this approval may result in restrictions on travelling abroad.
• Inability to contact: In some cases, you may be required to maintain contact with the relevant authority during your bankruptcy period. Failing to provide adequate contact information or not being reachable after reasonable attempts can lead to restrictions on travel.
• Financial concerns: If you cannot demonstrate that you have the financial means to travel without relying on credit, your request may be denied. This could include showing that you saved the money while bankrupt or that a third party is funding your trip.

Penalties for travelling without permission

If you are bankrupt, you must request permission from your trustee to travel to another country. This is done by submitting a travel request in writing or verbally. If you travel overseas without permission, you are committing an offence under the Bankruptcy Act and could face serious penalties.

The penalties for travelling abroad without permission while bankrupt are serious and can include:

• An extension of your bankruptcy for up to 8 years.
• A term of imprisonment.

The specific penalties will depend on the country in which you are declared bankrupt. For example, in Australia, the Bankruptcy Act 1966 imposes a maximum penalty of imprisonment for 3 years upon conviction. In Northern Ireland, if you are an undischarged bankrupt, you must obtain the written consent of the Official Receiver to travel to Great Britain or the Republic of Ireland. To travel to any other country, you must apply to the court for leave.

Trustee's role and powers

When a person becomes bankrupt, they must surrender their passport to their bankruptcy trustee. The trustee's role is to be a custodian of the passport, not to prevent the bankrupt individual from travelling when there are legitimate reasons to do so. The trustee's main function is to realise the assets of the bankrupt individual for the best possible price and distribute the money to creditors in a strict order of priority. They may also request that the bankrupt individual pay any outstanding income contributions before approving travel.

The trustee can place restrictions on travel approval and may hold the bankrupt individual's passport during the bankruptcy. They can also request a 'bond' payment before approving travel, which is refundable upon the passport's return and agreed travel terms being met. Bonds are occasionally requested when there are concerns about the bona fides of the trip or suspicions that the bankrupt individual may intend to abscond.

The trustee will likely ask questions such as "Where are you travelling to?" and "Who will be paying for the trip?" when reviewing a travel request. The trustee must also report to a committee that is appointed to protect and promote the creditors' interests and is accountable to this committee for their costs and expenses.

In addition to selling property, the trustee's responsibilities include reviewing paperwork, checking identification, investigating and locating undisclosed assets, and reviewing creditors' proof of claim forms for payment. The trustee will be the primary contact for the bankrupt individual throughout the case.

Frequently asked questions