Dictionary

  • Statement of affairs (in the context of bankruptcy)

    A financial report setting out assets and liabilities, similar to a balance sheet, prepared by or on behalf of an insolvent person (a bankrupt) and either filed with the Registrar in Bankruptcy following the making of a sequestration order against the insolvent estate, or accompanying a debtor’s petition against him/herself. It gives creditors who have approved a scheme of arrangement an indication of how much money may be realised in the event of a bankruptcy.

    The Bankruptcy Act 1966 (Cth) section 54 dictates that once a sequestration order is made (which renders someone formally bankrupt), the bankrupt has 14 days to file a Statement of Affairs with the Official Receiver. The three-year bankruptcy period does not commence until the Statement of Affairs is filed. As such, if a Statement of Affairs is filed after the 14 day period, the period of bankruptcy will be extended by however long it takes to file.

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