Bankruptcy is a practical solution for those dealing with unmanageable debt. It is a legal process that establishes the inability to repay debts. It can remove most debts to start fresh.

  • Stop creditor and debt collection calls
  • Release you from most debts
  • Get a new financial start
  • Remove financial anxiety and stress


Remove financial pressures and stop collection calls

A legal solution

Tackling insolvency head on may allow for more options

Completing Bankruptcy

Bankruptcy generally lasts for 3 years and 1 day

How it works

What exactly is Bankruptcy?

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.


Are there benefits to bankruptcy?

At a certain point, when debts have become unmanageable with no prospects of getting better – starting over may be the best option.

  • Most debts are removed (see below whats not covered)
  • Stop any creditor or collection calls
  • Have a set completion date (generally 3 years and 1 day)
  • Complete clarity on your financial situation
  • Fresh start

What are the drawbacks?

As bankruptcy is a serious financial decision and process, there are consequences to it.

  • It may affect your ability to obtain certain credit (for a period)
  • Overseas travel can be impacted (need permission)
  • Not all debts are released/removed
  • It can impact employment, income or business.
  • You will have to work with a trustee over the course of the bankruptcy
  • Your credit will be impacted. Credit agencies keep a record of your bankruptcy. 5 years from the start of your agreement or 2 years from when it ends.

Bankruptcy Considerations

Debts that can be included

Most unsecure debt can be included into a bankruptcy:

  • Credit Cards
  • Store Cards
  • Payday Loans
  • Personal Loans
  • Medical Fees
  • Outstanding Bills (utility, phone, etc)
  • Overdrawn bank accounts
  • Unpaid rent

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.

Do I qualify for bankruptcy?

Below are the main eligibility requirements of bankruptcy:

  • You’re present in Australia or have a residential or business connection to Australia
  • Be insolvent (unable to pay debts)
  • If in a debt agreement, you must terminate this first
  • There is no minimum or maximum amount of debt needed to qualify

A creditor however can proceed to make you bankrupt if the debt you owe is $5,000 or more.


Need some help?

What items can I keep if filing for bankruptcy?

Each bankruptcy is different and so are the requirements. Below are general guidelines on what can be kept.

  • General household items such as clothes, furniture, TV, computer, etc
  • A vehicle in which you have less than $7,700* equity
  • Tools of trade to the value of $3,750*
  • Up to $1,000 in bank accounts (deemed to be for living expenses)
  • Superannuation, life insurance policies and personal injury compensation payments

* Values are as at December 2017

How much does it cost to file for bankruptcy in Australia?

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

What are the employment restrictions of bankruptcy?

Restrictions for employment can include:

  • Can not be a company director during the bankruptcy
  • Unable to manage a company without permission of the court
  • Certain industries may have restrictions to employment – ie. Financial services
  • Review a list of professions where restrictions may apply.

Can I apply for loans during bankruptcy?

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.

Will I lose my house in 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.

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