Get help before you apply
If you don't think you'll be able to repay your debts you can
apply for bankruptcy. Only do this if you have explored all other
options, and seek legal advice or financial counselling before you
Bankruptcy is a process where you are legally declared unable to
meet your debts. When you apply for bankruptcy you will be released
from most of the debts you owe and debt collectors will stop
You need to consider carefully whether declaring bankruptcy is
the right step for you. Being bankrupt can permanently affect
whether you can get credit in the future.
Once you are declared bankrupt, you are classified as bankrupt
for 3 years and a trustee is appointed to look after your
Your bankruptcy will be listed on your credit report for 2 years
from the date your bankruptcy ends, or up to 5 years from the date
you became bankrupt, or longer in some circumstances. It will also
appear on a publicly-accessible register called the National Personal
Insolvency Index (NPII).
You cannot be a director of a company without leave of the court
and you may not be able to work in particular trades and
professions. See AFSA's website for more information on
There are other ways to sort out your finances other than
A financial counsellor can explain
options like debt recovery procedures. Financial counselling is a
free and confidential service. If you decide you do want to
declare yourself bankrupt a financial counsellor can help you to
understand the consequences.
Community legal centres and Legal Aid offices offer free legal
advice on bankruptcy. Services are available in every state and
How to apply for bankruptcy
See the Australian
Financial Security Authority (AFSA) for information on how to
declare personal bankruptcy.
If you're struggling with repaying your debts,
it is important to get help straight away so you understand your
options. Only consider declaring bankruptcy as a last resort.
Last updated: 14 Oct 2016