Consequences of temporary debt protection (TDP)

It's a serious step to apply for temporary debt protection (TDP). Learn about how the consequences will impact you if you proceed.

If you lodge a temporary debt protection your creditors are:

  • notified by us of the six month protection period and given a copy of your financial affairs.
  • unable to enforce recovery of unsecured debts for six months - 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 six months 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.