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7.13.3 Debts incurred after bankruptcy

7.13.3.1When an overpayment occurs after a person has been declared bankrupt, the new debt does not form a part of any bankruptcy action currently in force. However, recovery of such debts can only be pursued through deductions from a person's pension in relation to amounts which qualify as 'overpayments' for the purposes of paragraph 205(2) (a) VEA. Recovery of such debts should not be pursued via payment notice under section 205A VEA until such time as the debtor has been discharged from bankruptcy. Staff seeking to recover from assets (such as FI accounts) should, check with the Insolvency Trustee Service of Australia (ITSA) first to ensure that the asset is not part of the bankrupt estate.    

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7.13.3.2In cases where limitations are in place or a payment notice has been issued in order to recover a debt, any debt that occurs after bankruptcy should be recovered after the first debt has been finalised.

7.13.3.3Where the date of bankruptcy falls during an overpayment period, the total overpayment must be divided into two parts, i.e. two overpaid periods exist. Two overpayments must be raised, one prior to, and one after, the date of bankruptcy.

Insolvency Trustee Service of Australia (ITSA) website

http://www.itsa.gov.au

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