How Long Is Bankruptcy In Australia?
Declaring bankruptcy can be a challenging experience as it can leave a lasting impact on your life. If you are facing financial distress and are considering filing for bankruptcy, it is essential to ensure it is your last resort.
Bankruptcy might seem easy but there are numerous things you should know before deciding to file for one. When considering bankruptcy, it is natural to wonder how long the process will take, how long would it last, and the duration it stays on our record. Understanding these crucial timelines of bankruptcy is essential to make sure that you are making the right decision.
How Long Does It Take To File For Bankruptcy in Australia?
When you decide that bankruptcy is the only solution for you to get out of your financial problems, you would first need to complete the bankruptcy form and submit it. Be sure to have all the important things with you while filling the out form.
It will take you anywhere from 30 to 60 minutes to complete and submit the form if you have all the information available. Remember, this form is a Statutory Declaration and providing misleading or untrue statements could cause significant penalties including monetary fines and/or jail – do not rush the preparation of the Bankruptcy Form.
Once you have submitted the form and it has been approved, you will be declared bankrupt, indicating you can’t pay off your debts. If you are lodging the form electronically, it may take several days for AFSA to review and approve the document.
This legal process will free you from almost all of your debts and give you an opportunity to start afresh. However, you would still have to pay some debts that are not covered in bankruptcy and also have to face the serious and lasting consequences of being bankrupt. This is the reason it is important to consult a bankruptcy expert before declaring bankruptcy.
How Long Does Bankruptcy Last In Australia?
Typically, bankruptcy in Australia lasts for three years and one day but it could be extended, depending on the situation. Let’s have a closer look:
Standard Three Years And One Day Period
As mentioned earlier, the standard duration of bankruptcy is three years and one day from the day your bankruptcy form is accepted by the Australian Financial Security Authority (AFSA). At the end of this period, you will be released from bankruptcy.
Extended Period
If you present the Debtor’s Petition, the standard period begins when the official receiver at AFSA accepts your application. However, if you are made bankrupt via a Sequestration Order that is made through a Court order on the application of one of your creditors, then the bankruptcy period doesn’t commence until you lodge the Statement of Affairs.
This means that even when you become bankrupt, you won’t be discharged from bankruptcy until the end of three years, starting from the day the bankruptcy form was filed. Moreover, if you fail to file the bankruptcy form, you will stay bankrupt indefinitely.
Aside from this, if you fail to follow the rules and guidelines highlighted by your trustee, your bankruptcy period can be extended due to “bad behaviour.” Your trustee can file for an objection to your bankruptcy discharge that could result in your bankruptcy period getting extended to five or eight years, depending on the extent and nature of the bad behaviour.
Is It Possible to Finish The Bankruptcy Early?
It is a rare occurrence but it is possible to get your bankruptcy annulled. You have to pay back all your creditors in full or make an offer your creditor accepts.
How Long Do I Have To File For Bankruptcy?
There isn’t any time limit to file for bankruptcy in Australia. In order to apply for bankruptcy and get accepted, you have to meet the following two requirements:
- You can’t pay your debts when they are due
- You are an Australian citizen, are present in the country, or have a business or residential connection to Australia
There is also no maximum or minimum amount of income or debt you must have in order to be eligible to apply for bankruptcy. There isn’t any fee required to file for bankruptcy.
How Long Does Bankruptcy Stay On Your Record In Australia?
Once you have been declared bankrupt, it will stay on your credit report for either two years from when you are released from bankruptcy or five years from the day you were declared bankrupt. It will depend on whichever one is the latest.
Throughout the time the bankruptcy appears on your credit record, you are bound to struggle when trying to obtain credit or loans.
Aside from remaining on your credit record, your bankruptcy will also negatively impact your credit ratings. Your credit rating or credit score is the number that the credit reporting agency calculates. It highlights your credibility and trustworthiness as a borrower.
Most lenders factor in the credit score when deciding whether or not an individual should be eligible for a loan or any credit product. It also helps determine the interest rate you would be charged with.
While it hasn’t been specified by credit reporting agencies how much bankruptcy can impact the credit score, it certainly takes a long time to recover from it.
Some other consequences include:
You can’t be a director of a company whilst bankrupt, but can be after discharge
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- You have to inform all your creditors about your bankruptcy when opening a new business
- You can’t travel abroad unless your trustee grants you the permission
- You can’t own assets that are worth more than a threshold amount
- You are not released from all your debts
What Do I Need To Disclose When Applying for a Loan After Bankruptcy?
When you apply for a loan after being declared bankrupt, you have to inform the lenders about your bankruptcy if the loan amount is over the specified limit. This specified limit gets indexed ever quarter, which is why it is important to always check or consult a bankruptcy specialist first.
Using the right professional bankruptcy assistance, you would be able to make an informed decision and come out of your financial problems. Get in touch with us for a free consultation
Reviews
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As a Trustee in Bankruptcy, Ross Thomson is often required to think outside the box. As well as creative thinking, Ross brings compassion to the table.
For Ross, it’s important to see the people behind the financial problem –not just numbers.
Ross recently helped a bankrupt client who lives in a retirement village with her seriously ill husband.
The unit she & her husband live in is not owned by them, but subject to a 20-year lease.
The money to be repaid by the management was due only at sale, when the client finally left the retirement village.
Sale of the unit was likely to take several years &, if he did sell the couple’s unit, Ross realised he would be effectively evicting them from their home, without resources or family to help them.
Ross decided to contact the retirement village management & put a proposal to them that they prepay some of the moneys they would otherwise pay the client.
The village management considered the proposal & have agreed to prepay some of the moneys otherwise due.
The client is relieved that she will not be evicted & can now concentrate on helping her husband through his health issues.
The moneys paid represented about 75% of what would have been available to creditors if they waited two years.
It is a win for the client and for the creditors.
Melinda
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I made an appointment with Andrew after finding him on google. I was nervous and apprehensive about what to expect but he made the process of bankruptcy extremely uncomplicated and stress free, allowing myself the opportunity to get the fresh start I was so desperate for. Thank you Andrew I could not recommend you enough.
Kristy
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Making the decision to go bankrupt was not easy however once I had spoken to Andrew i felt all my anxiety disappear. Andrew does not judge you and he has an innate ability to put you at ease. He took care of the whole process for me again reducing the stress involved with completing paperwork.
Thank you very much.Hayley Eastough
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I will definitely recommend Andrew Bell to anyone contemplating bankruptcy. Don't wait! Andrew is there to help. With his knowledge, he can advise you of the best path to take and assist with the mind boggling paperwork.
Best of all, he is there for you through your entire bankruptcy period. Get your life back, it's not as bad as you think. Thank you Andrew for lifting the burden and allowing me to move on.
Karilyn Mahon
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I saw Andrew for 'advice only' on possible bankruptcy due to a divorce. Left an hour later with the paperwork all done and feeling like a new person!
Andrew was extremely welcoming and made me feel so comfortable with my decision to proceed immediately.
This was the best investment I have ever made and cannot speak highly enough of Andrew. He doesn't just give excellent service his follow up afterwards is amazing. Thankyou Andrew you made my 'new' life so easy to achieve!
Vicki Johnston
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Andrew was very helpful in helping me through the bankruptcy process, as a single mother left with a massive debt from my ex and our previous marriage. I was struggling to keep my head above water on a week to week basis.
Andrew made me feel at ease immediately and helped me every step of the way, he happily and professionally answered any and all questions I had before, during and after the process. Thanks so much for your help Andrew!
Aisha Edmonds
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Would highly recommend Andrew to anyone having financial difficulties. Andrew made me feel very comfortable - he took care of everything and keep in regular contact with me throughout the whole process.
Service was fantastic and he also keep in regular contact with me when everything had been finalised Thanks Andrew! can now get my life back on track.
Cassandra Walsh
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Very prompt service and excellent source of knowledge and information, I highly recommend Andrew's service for a quick turn around of circumstances.
Eve Damjanovich
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Andrew put my mind at ease in one easy appointment. Very satisfied with the outcome and service provided. Highly recommend Andrew.
Tracey Douglas
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Andrew was a steadying hand with his advice.Showing that things aren't as bad as first thought nor any obstacle insurmountable. If you have questions needing answers, Andrew is the person to ask. Thanks for your advice Andrew.
Shane Thompson
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Andrew was very knowledgeable, caring, helpful and compassionate when I went and saw him. He made me feel that I wasn’t the loser and failure that I thought I was being. Even down to the box of tissues on the table.. which I needed. Highly recommend to go see Andrew if your struggling. There is life after!
Joanne Parker
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Andrew and his team do an excellent job of helping their clients with bankruptcy advice and it is a pleasure to work with him.
Gareth Lane
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Don't hesitate contacting Andrew, I was stressed, struggled sleeping through debt. Andrew put me at ease. He listened to my situation and we decided on my next move. Andrew is professional and easy to talk too. I would recommend highly to anyone who wants help to give him a call. I appreciate your support Andrew. Regards Brett.
Brett
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Andrew has given me back my life!!! After living paycheck to paycheck, I didn’t know what to do. Until I made the big step and booked an appointment with Andrew. As soon as I left his office I felt a huge weight lifted!!!
Deezy H
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Andrew was prompt, organised, friendly and efficient with the processing of my documents and made everything very simple for me so I didn’t need to deal with the added pressure and stress. Thank you Andrew for allowing me to start afresh and getting it done within a matter of weeks.
Kristy-lee
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