Bankruptcy assistance

When all else has failed, Bankruptcy can offer you a chance to start again.

If you are facing a situation where there's no money left to live on once all the bills are paid, Bankruptcy provides an opportunity to start rebuilding.

Some issues you should be aware of:

Before deciding on this course of action, you should refer to the Government website Australian Financial Security Authority.  On this site you will see details of all the outcomes of Bankruptcy, which include:

  • You will no longer be able to act as a Company Director
  • Overseas travel may be affected and you must apply with good reason to leave the country
  • If you own a home or have a share in property, speak with one of our state managers to discuss strategies that could help you keep the family home
  • You will still be able to run a business as a Sole Trader or partnership
  • You can keep a motor vehicle up to the value of $7,800 (as of 25th October 2017)
  • You can keep tools of trade up to the value of $3,700 (as of 25th October 2017)
  • You can keep everyday household items
  • Your superannuation is generally protected
  • While existing debt repayments stop, you must pay 50% of all income over a pre-set limit (determined by number of dependents you may have). Income includes: Tax Returns, Termination Payments, Inheritances and Windfalls
  • You will need to complete income information forms every year
  • You must supply all paperwork to the administrator who is appointed for you - on an annual basis
  • Not all debt will be removed. Some of these include Traffic Fines, Tolls, Parking Tickets, HECS debts and Child Maintenance and any debts created after your Bankruptcy.
  • If you own a home or have a share in property, this could be at risk of being sold. Speak to one of our Business Partners to discuss strategies that could help you keep the family home.


  1. Creditors can apply for a garnishee of your wages, leaving you little money to live on.
  2. If your creditors are aware you have any assets such as a car, boat or house they may force you into bankruptcy, so that they can collect the proceeds from the sale of your assets.
  3. Your credit file may continue to be adversely affected by creditors listing unpaid defaults and judgments 
Yes. Your application may be rejected if it appears that: 1. You are likely to be able to pay the debts. 2. You are avoiding payment of a particular debt(s). 3. You have been bankrupt previously.

You are eligible to present a debtor’s petition for bankruptcy if you are in Australia or have an Australian connection (eg you do not usually live in Australia or carry on business in Australia).

No. You can become bankrupt voluntarily owing any amount.

You should make contact with your trustee without delay. If you are unsure who your trustee is, contact AFSA and quote the court reference number that is on the sequestration order.

Your trustee will be able to provide you with information and answer your questions. You must cooperate with your trustee and provide information upon request. Failure to cooperate with your trustee is an offence under the Bankruptcy Act. You must complete and file a statement of affairs form within fourteen days of being notified of your bankruptcy.

1. Your assets may be sold. You will be able to keep ordinary household goods, tools (up to a certain value) and a vehicle (up to a certain value) but other assets – including your house – can be sold by your trustee. In some circumstances you may be able to make an arrangement to keep your house. You cannot conceal, remove or dispose of any property inside or outside Australia. If you do, you may be subject to criminal prosecution.

2. Your income, employment and business may be affected if your income exceeds a certain limit. You may be required to make contributions from your income. You cannot be a director of and/or manage a company. However you can operate a business as a Sole Trader or a Partnership. Some professional/licensing bodies may restrict or prevent you from continuing in that trade or profession. You may not be able to hold certain public positions. If you are in business and trade under a business name different to your own, you must tell everyone you deal with that you are bankrupt. If you don’t, you may be subject to criminal prosecution. Whilst you are bankrupt you will be prohibited from managing a company, without the permission of a court.

3. You may not be released from all debts. You are released from most of your unsecured debts (eg credit cards, personal loans, store cards) once you are discharged from bankruptcy. Some types of debts are not covered by bankruptcy e.g. Court penalties, fines and child support debts. Further, if a debt that is covered by the bankruptcy is found to have been incurred by fraud, then you will still owe the balance remaining upon discharge. If a debt is secured against an asset (eg. a mortgage on a house or car) and you do not maintain repayments, that creditor can repossess and sell the asset; however any shortfall between the mortgage amount and the sale price will be covered by your bankruptcy.

4. Your ability to travel overseas will be affected. You will not be able to travel overseas without the written permission of the trustee and you may be asked to surrender your passport to the trustee. If your bankruptcy is administered by the Official Trustee you will be required to pay an overseas travel application fee. Applications to travel overseas for family reasons and work are generally granted.

5. Your ability to obtain future credit will be affected. You will find it hard to borrow money and buy things on credit. You may find it hard to rent, get electricity, water or the telephone connected without paying a bond. Some banks may not let you operate an account or may restrict how you can use your account. If you obtain credit above a certain amount you must tell the supplier that you are bankrupt.

A trustee is appointed to administer the bankruptcy. The duties of a trustee are specified in legislation and trustees have to adhere to certain standards while administering your estate. In order to pay creditors, your trustee will:  sell your assets, including those you acquire or become entitled to during your bankruptcy (although you will be able to keep certain types of assets) recover any income you earn over a certain limit, investigate your financial affairs and may, in certain circumstances, recover property that you have transferred to someone else prior to your bankruptcy. You can choose to appoint a registered trustee by obtaining and providing their consent when you lodge your petition to become bankrupt. If you do not choose a trustee, AFSA becomes your trustee and may arrange for a registered trustee to be appointed. Otherwise, AFSA is initially appointed to administer your estate. Your creditors may choose to change the trustee at any time. If you are made bankrupt involuntarily, the court will appoint a trustee at the time of making the sequestration order.

For more information please refer to the Australian Financial Security Authority site


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