Bankruptcy

Are you facing financial challenges and need support with the Bankruptcy process?

We are always happy to help you answer any questions

• What is bankruptcy?

  Bankruptcy is a legal process offering debt relief to individuals unable to manage their financial obligations. It can help reset your financial situation while addressing debts responsibly.

• How long does bankruptcy last?

  If you enter bankruptcy voluntarily, it normally ends 3 years and 1 day from when your bankruptcy application is accepted. After this period ends, you will be “discharged” from bankruptcy. However, its impact on credit reports and restrictions may extend beyond this period.

  In some cases, this period can be shortened. For example, if your circumstances changed and you are able to pay all creditors in full, your bankruptcy will be annulled before the discharge date. 

  This period can also be extended in situations when a person breaches the requirements under the Bankruptcy Act. With us, you will be provided with a comprehensive list of your rights and responsibilities, which will also be explained to you, so you know exactly what to expect and what you need to do. We will also guide you through the bankruptcy process to ensure that you comply with the law, so the bankruptcy period does not have to be extended under the law.

• What happens to my assets during bankruptcy?

  Certain assets may be sold to repay creditors. However, some assets are often protected, such as essential household items and assets of sentimental value. There are also other assets like a car and tools of trade that are protected up to a certain value.

• What happens to my family home?

  In usual circumstances, if you own your family home and its value is more than what you owed to your bank, it is called equity. Your trustee usually would realise the equity in your home, but it does not always mean the house has to be sold on the open market. We will discuss your personal circumstances and whether there are options available to keep the house for your family. 

• Can I still earn income while bankrupt?

  Yes, but if your income exceeds a set threshold, you may need to make contributions to creditors. We will explain how your income is assessed during the bankruptcy and whether you will need to make contributions from your earned income.

• How does bankruptcy affect my credit rating?

  Once your Bankruptcy ends, there is no restriction on applying for loans or credit. It’s up to the credit provider to decide if they will lend you money. While you would disclose your Bankruptcy to your creditor provider, they are also likely to do their own independent check of your credit file and the National Personal Insolvency Index (NPII). 

  Bankruptcy is recorded on your credit file for either 2 years from when your bankruptcy ends or  5 years from the date you became bankrupt (whichever is later). Bankruptcy is also listed on the NPII permanently. However, it is likely that in the coming years this will be changed by the government so the Bankruptcy will be on the NPII for only limited time.

• Can I travel overseas while bankrupt?

  Yes, but you must seek permission from your bankruptcy trustee before traveling overseas. Without this permission, your travel plans may be restricted. 

• Will all my debts be cleared through bankruptcy?

  No, not all debts are cleared. While unsecured debts like credit cards and personal loans are typically covered, certain debts such as court fines, HECS/HELP loans, and child support payments cannot be discharged through bankruptcy. You will need to pay them even after your bankruptcy ends.