What does Bankruptcy mean?
Bankruptcy is a legal process where you're declared unable to pay your debts. It can release you from most debts, provide relief, and a fresh start. You can enter into voluntary bankruptcy by completing and submitting a Bankruptcy Form. It's also possible for someone you owe money to (a creditor) to make you bankrupt through a court process, which we refer to as a sequestration order.
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Bankruptcy normally lasts 3 years and 1 day. However, bankruptcy is just one formal option available under the Bankruptcy Act to manage your debt. Other formal options include temporary debt protection for 21 days reprieve from creditors enforcing a judgment against you, a debt agreement, or a personal insolvency agreement.
When you are bankrupt:
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You must provide details of your debts, income, and assets to your trustee.
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Your trustee notifies your creditors that you’re bankrupt. This prevents most creditors from contacting you about your debt.
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Your trustee can sell certain assets to help pay your debts.
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You may need to make compulsory payments if your income exceeds a set amount.​
Bankruptcy may have a serious impact on you, affecting your ability to get credit, travel overseas, or gain some types of employment. The National Personal Insolvency Index is a searchable public register listing insolvency proceedings in Australia.
You can apply for bankruptcy if you meet these two requirements:
You're unable to pay your debts when they are due (insolvent).
You're present in Australia or have a residential or business connection to Australia.
For more information about how we can assist you or your organisation, please phone us on 02 6622 2171