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It's a serious step to apply for temporary debt protection (TDP). Learn about how the consequences will impact you if you proceed.
What happens when you enter a temporary debt protection?
If you lodge a temporary debt protection application, your 21 day protection period starts from when we accept your application.
When we accept your temporary debt protection application, your creditors are:
- notified by us of the 21 day protection period and given a copy of your financial affairs.
- unable to enforce recovery of unsecured debts for 21 days - this includes garnishing of wages and seizing property.
- able to start or continue legal action but can't take enforcement action to recover the debt.
- able to continue recovery for a secured debt e.g. house or car.
Other impacts of temporary debt protection
- You are committing an act of bankruptcy (formally known as a Declaration of intention to lodge a Debtor’s Petition) under s54A of the Bankruptcy Act 1966. A creditor could use the fact you have lodged a TDP as the basis for an application to the court to make you bankrupt.
- After 21 days you are not automatically bankrupt, and creditors can again resume trying to recover their debts.
If you need to appear in court and are unsure if you should attend, contact the court. For more information about legal assistance see Seek legal assistance
A financial counsellor may assist you to make an informed decision. For more information see Where to find help.
How do I apply for temporary debt protection?
If you understand the consequences of proceeding with temporary debt protection and think this is the right option for you, you can apply by lodging a temporary debt protection form.