Understanding Personal Bankruptcy Laws

The Bankruptcy Advisory Centre is an AFSA and ASIC registered adviser with over 30 years of experience providing bankruptcy advice in Australia and helping everyday Australians resolve their financial problems. Our expert team offers various debt solutions for individuals and businesses across Australia from our  Sydney, Melbourne, Brisbane, and Perth offices.

Bankruptcy is a legal process in Australia that relieves individuals and businesses who cannot pay their debts. This comprehensive guide will explore the bankruptcy laws in Australia, including the bankruptcy process, exemptions, trustees, and bankruptcy discharge.

Bankruptcy Laws

The bankruptcy process is governed by the Bankruptcy Act 1966 and is administered by the Australian Financial Security Authority (AFSA). It sets out the legal framework for the bankruptcy process, including the rights and obligations of debtors, creditors, and trustees. It is essential to understand this framework so you can make informed decisions when considering bankruptcy.  

Personal Bankruptcy

Personal bankruptcy, also known as personal insolvency, is a legal process allowing individuals to declare themselves bankrupt and discharge their debts. This process is available to individuals who cannot pay their debts as they fall due. There are some exceptions to the debt obligations that are not covered by bankruptcy, such as ATO tax debt and Child support. You can find out more by downloading our guide to bankruptcy here.

The Bankruptcy Process

The bankruptcy process involves the appointment of a bankruptcy trustee who manages the affairs of the bankrupt estate. The trustee is responsible for realising the bankrupt estate’s assets and distributing the proceeds to the creditors. Bankruptcy Advisory Centres are AFSA and ASIC-registered advisers who can guide and advise you on the bankruptcy process.

Bankruptcy Regulations

In addition to the Bankruptcy Act 1966 federal register of legislation, the Bankruptcy Regulations 2021 are a secondary set of governing legislation for bankruptcy in Australia. They set out the administrative and procedural requirements for the bankruptcy process.

Asset Exemptions in Bankruptcy

Certain assets are exempt from the bankruptcy process. These include household goods, tools of the trade, and superannuation. Once you enter into bankruptcy, these exemptions are designed to protect your assets, known as “the bankrupt’s” assets.

Understanding Bankruptcy Laws

Understanding bankruptcy law in Australia is essential for individuals struggling with debt. By understanding the legal framework for the bankruptcy process, you can make informed decisions about your financial future. Our expert team offers various debt solutions for individuals and businesses across Australia from our Sydney, Melbourne, Brisbane, and Perth offices. We can help you make an informed decision and provide expert guidance and solutions that suit your needs – judgement-free. Our goal is to provide a clear pathway to financial freedom, free of the hassles and worries that come with debt collectors, threatening letters and phone calls.

Bankruptcy Discharge

How long are bankruptcies in Australia? This is a common question. A bankruptcy discharge is a legal process by which the debts of a bankrupt are extinguished. The discharge is available to individuals who have completed the bankruptcy process and met the requirements for discharge. This process usually takes three to five years, depending on the individual’s circumstances.

Need more Information About the Types of Bankruptcy?

“Bankruptcy Advisory Centre offer personal debt solutions tailored to your situation. Claiming bankruptcy or personal insolvency may be your best option if you are drowning in debt and constantly stressed over your financial future. Even though bankruptcy cannot eliminate all your debts and obligations, it does deal with most creditors and, in doing so, leaves you more room to manage your financial responsibilities. If declaring bankruptcy is the only way out of overwhelming debt, a professional, such as the team at the Bankruptcy Advisory Centre, can guide you through the process.”