Remove financial pressures and stop collection calls
Tackling insolvency head on may allow for more options
Bankruptcy generally lasts for 3 years and 1 day
There are two general forms of bankruptcy – debtors petition (voluntary bankruptcy) and creditors petition (involuntary bankruptcy). Bankruptcy is a process where a person is legally declared unable to repay their debts. If you’re dealing with unmanageable debt, and have explored all possible options with no success, bankruptcy may be your best option.
Whilst bankruptcy has certain financial consequences, sometimes these drawbacks offset current stress and financial struggles.
At a certain point, when debts have become unmanageable with no prospects of getting better – starting over may be the best option.
As bankruptcy is a serious financial decision and process, there are consequences to it.
Most unsecure debt can be included into a bankruptcy:
Unsecure items that require confirmation include: Centrelink debt, ATO debt, toll fines and victims of crime debt. Bankruptcy does not cover child support, HECS & HELP, court imposed fines, unliquidated debts and new debts post original bankruptcy.
Below are the main eligibility requirements of bankruptcy:
A creditor however can proceed to make you bankrupt if the debt you owe is $5,000 or more.
Each bankruptcy is different and so are the requirements. Below are general guidelines on what can be kept.
* Values are as at December 2017
The cost of bankruptcy can range based on your situation and how you file. Here is a list of service fees from the Australian Financial Security Authority (AFSA) – Fees & Charges
Restrictions for employment can include:
In short, yes, you can apply for new credit during bankruptcy. You however need to disclose your bankruptcy.
In many cases it may be difficult to access new credit. Do note that your credit report will be free of any bankruptcy listing after 5 years from the date of your bankruptcy.
Real estate including your home, investment properties and land can be lost in bankruptcy. There may be circumstances that allow you to keep your home but this is determined during the bankruptcy.
