Understanding the Bankruptcy Process in Australia

The bankruptcy process in Australia is designed to help individuals and businesses who cannot repay their debts. When an individual or a company declares Bankruptcy, their assets are sold off to repay their creditors. At Bankruptcy Advisory Centre, we can guide you through how to claim Bankruptcy yourself and explain topics such as who pays for bankruptcies, how long defaults are in Australia and three types of bankruptcies.

Bankruptcy Guide Introduction

The bankruptcy process is governed by the Bankruptcy Act 1966 and is administered by the Australian Financial Security Authority (AFSA).

To be declared bankrupt, an individual must either owe a debt of at least $5,000 or be unable to pay it. Or they must be unable to pay their debts as they fall due. Bankruptcy can be initiated by an individual themselves or by one of their creditors.

Once an individual is declared bankrupt, they must cooperate with their trustee, who the AFSA appoints. The trustee manages the individual’s assets, sells any non-exempt assets, and distributes the proceeds to their creditors. During this time, the individual will be subject to certain restrictions, such as being unable to obtain credit over a certain amount without disclosing their bankruptcy status.

The bankruptcy process usually lasts three years, after which the individual will be discharged from Bankruptcy, and their debts will be deemed satisfied. However, the discharge may be extended for up to eight years in certain circumstances.

Need more information about Bankruptcy Process in Australia?

“It’s important to note that the bankruptcy process can significantly impact an individual’s financial future, including their credit score and ability to obtain credit in the future. Therefore, you should understand all the aspects of the bankruptcy process before deciding to declare Bankruptcy, for example, knowing how long bankruptcies last.

At Bankruptcy Advisory Centre, we’re committed to helping individuals navigate this complex process. Our team of experts can guide you through bankruptcy laws and help you understand what steps you need to take to regain financial stability. Don’t let debt control your life; schedule a free consultation with us today and start on the road to economic recovery.