Although bankruptcy can provide relief if you are unable to repay your debts, there are consequences which may affect you. Being aware of these consequences can help you decide if this is the best option for you.
On this page:
To help understand the consequences of bankruptcy and how they may impact you, you can speak to a free financial counsellor. Their services are free, independent and confidential. They can provide advice about your financial situation and recommend the best option for you to deal with unmanageable debt. To speak with a free financial counsellor contact the National Debt Helpline on 1800 007 007.
For more information on financial counsellors and other support services see Where to find help.
A trustee is the person or entity that manages your bankruptcy. They work with you, and your creditors[?], to achieve a fair and reasonable outcome for all. During bankruptcy, you have an obligation to provide information to your trustee, including changes to your circumstances. This may involve supplying books, bank statements and other documents that the trustee asks you to provide.
When you apply for voluntary bankruptcy, you are able to nominate a registered trustee of your choice. If you don’t nominate a trustee, we normally appoint the Official Trustee (AFSA). In some cases, the Official Trustee may transfer the administration of your estate to a registered trustee.
For more information see: Income and employment
Most unsecured debts are covered in bankruptcy - this means you no longer have to repay these debts. There are some exceptions.
For more information see: What happens to my debts
You must request permission from your trustee to travel overseas. It's an offence to travel overseas without consent in writing. Your trustee may ask for further details to consider your request.
Case study: Alisha
Travelling overseas during bankruptcy
In the second year of her bankruptcy, Alisha needed to travel to New Zealand to attend a conference for work.
The National Personal Insolvency Index is a searchable public register listing insolvency proceedings in Australia.
For more information see: Who will know I’m bankrupt?
- 5 years from the date you became bankrupt or
- 2 years from when your bankruptcy ends, whichever is later.
For more information see: Who will know I'm bankrupt?
You are able to keep:
- ordinary household goods
- tools up to a set amount used to earn an income and
- vehicle(s) with a value up to a set amount.
Your trustee can sell other assets including your house and property. You must not dispose of any property belonging to the trustee. You must declare any assets you have when you apply for bankruptcy and any you receive during bankruptcy.
For more information about which assets a trustee can claim see: Assets that can be taken or sold
If you're involved in any legal action, you need to inform your trustee. If you have a pending court case, you should contact the court to confirm whether you must still attend. Contact the Commonwealth courts.
This starts from the day we accept your bankruptcy application. If a creditor makes you bankrupt, we calculate the bankruptcy period from the date you file your Bankruptcy Form. In some cases, your trustee can lodge an objection[?] to extend the bankruptcy for up to eight years.