Personal Bankruptcy Services

At SV Partners, we believe that bankruptcy is the last resort. We always work with clients to find alternative solutions to their financial problems.

The SV Partners team are experts in all facets of bankruptcy, and we take every care to make the bankruptcy process transparent and manageable for our clients.

How do I know if Bankruptcy is right for me?

If you are facing serious financial issues, it is important to seek professional advice before embarking on a course of action. To determine whether bankruptcy is the right solution, our experts will meet with you to assess your situation and discuss the most suitable solutions for addressing your financial problems.

Common warning signs that individuals are experiencing financial difficulties that may result in bankruptcy include:

  • Denial, believing the situation will go away
  • Increased tension with your spouse or partners, arguing over money issues
  • Receiving letters of demand, late payment notices, writs and/or bankruptcy notices from creditors, debt collectors or solicitors
  • Unable to pay creditors such as banks; unable to pay credit cards, invoices or bills on time or at all
  • Borrowing money from family and friends due to lack of savings (or spending all your savings)
  • Applying for more finance or credit, or often being denied for credit applications

What is Bankruptcy?

Bankruptcy is a legal process that provides protection to people who are unable to repay their debts or reach a suitable arrangement with their creditors. Although it is important to know your options and the consequences of bankruptcy before taking action, bankruptcy may be the most suitable solution. Bankruptcy allows individuals to be released from most debts, providing relief and helping you to make a fresh start.

Bankruptcy takes two forms. In the event that you are no longer able to pay your debts, you can declare Voluntary Bankruptcy (also known as a Debtor’s Petition). Alternatively, if you owe a creditor more than $10,000, they may apply to the court to make you bankrupt (also known as a Creditor’s Petition).

Once the act of bankruptcy has occurred, individuals are subject to various obligations and restrictions on their income, employment and business activities.

Learn more about Bankruptcy on the AFSA website, or see a list of AFSA guides in our resource centre.

What causes Bankruptcy?

In most cases, bankruptcy occurs when an individual is unable to pay all their debts. This may result in them receiving letters of demand, writs and/or bankruptcy notices from creditors, debt collectors or solicitors. Failing to act on these notices may cause creditors to bring bankruptcy proceedings against the debtor. Similarly, bankruptcy proceedings may be brought where an individual’s personal guarantees against company debts are called up.

Creditors may apply to the court to make an individual bankrupt if they can prove the individual has at least $10,000 in debt and that a bankruptcy notice has expired. Bankruptcy may also occur where a creditor is experiencing non-payment of a debt, dishonoured payments or where extended payment terms are not met by the individual. This is also true where a creditor has sufficient reason to believe that the debtor is disposing of, or transferring property, prior to their bankruptcy.

Property that is transferred with the intention of defeating creditors may still be recovered as part of bankruptcy proceedings. Read our guide to Bankruptcy Voidable Transactions here.

An individual may also enter into voluntary bankruptcy if they are:

  • Unable to pay their debts when they are due (known as insolvency), and;
  • Present in Australia or have a residential or business connection to Australia.

What are the expected outcomes of Bankruptcy?

During a bankruptcy, a third party (such as SV Partners) will be appointed as Registered Trustee to manage the bankruptcy process. The Trustee will assess, recover and sell your assets for the benefit of creditors. Trustees are also charged with performing a comprehensive investigation into your financial affairs and with recovering Voidable Transactions. Proceeds from the sale of your assets will be distributed among creditors according to predetermined priorities.

Through the bankruptcy process, existing debts are extinguished, providing relief from debt for individuals. Bankruptcy also provides relief from creditor demands and allows individuals to start their life afresh, free from most debts.


How to declare Bankruptcy

Before applying for bankruptcy, two eligibility criteria must be met:

  • The individual must be unable to pay their debts when they are due, and;
  • The individual must be present in Australia through a residential or business address.

There are no eligibility criteria concerning income or debt levels for individuals.

It is recommended that individuals speak to qualified professionals if they are considering applying for bankruptcy. Bankruptcy carries serious, lasting consequences, and it should be considered a last resort.

To declare bankruptcy, the individual needs to complete an application form (Bankruptcy Form). You can do this with the Australian Financial Security Authority (AFSA) using their online portal. Or, if you have arranged for a Trustee (such as SV Partners) to assist you, you need to complete a Consent to Act Declaration with your Bankruptcy Form. Your Trustee can take care of completing forms properly and lodging them with AFSA.

After receiving an application, AFSA reviews your circumstances and determines whether to approve the application or not.

Visit our resource centre for a range of bankruptcy forms.

How long does Bankruptcy last?

In most cases, bankruptcy lasts for 3 years and 1 day.

Throughout the bankruptcy term, the bankrupt will need to meet certain obligations and responsibilities.

In some instances, your bankruptcy may be extended beyond the normal 3 years and 1 day, to a term of up to 8 years. Bankruptcy terms are extended where your Trustee lodges an Objection to Discharge on the basis that you have not complied with your obligations during your bankruptcy. Non-compliance with your bankruptcy may include failures to:

  • Provide information to the Trustee and disclose all income
  • Make compulsory payments to the Trustee (if applicable)
  • Explain your expenditures
  • Be forthcoming and disclose all assets and debts

It is important to remember your obligations as a bankrupt. Failure to comply with bankruptcy requirements may result in a prolonged bankruptcy term.

How long does Bankruptcy stay on file in Australia?

Once an individual enters bankruptcy, their name and other personal details are listed permanently on a public register known as the National Personal Insolvency Index (or NPII). This record is permanent and the register can be searched by anyone at the cost of a small fee.

A bankruptcy listing shows your personal information, including:

  • Full name
  • Date of birth
  • Residential address
  • Occupation
  • Other names you may have been previously been known by
  • The details of the bankruptcy administration and Trustee contact information
  • The current status of the bankruptcy (discharged or current)

Along with a permanent record of the bankruptcy on the NPII, the appropriate credit bureau keeps the details of the bankruptcy on record. This remains on an individual’s credit file for 5 years from when they became bankrupt, or 2 years from when the bankruptcy ends (whichever is later).

In circumstances where a bankrupt has a genuine safety concern (such as witness protection or as the victim of domestic violence), they may apply to have their address removed from the NPII. Their name and date of birth will always remain on the NPII.

What are the consequences of Bankruptcy in Australia?

Although bankruptcy is designed to relieve individuals of their unmanageable debts, it is vital to understand that there are consequences to filing for bankruptcy. Once bankruptcy is filed and a Trustee is appointed, the Trustee becomes the sole controller of the Bankrupt’s finances. This arrangement ensures that debts to creditors are fairly managed and paid to achieve the best possible result.

Consequences of declaring bankruptcy include:

  • Selling off assets to pay debts
  • A bankrupt is obligated to provide information to the Trustee relating to changes of circumstances, such as employment, income and business statements
  • Bankrupts may be required to make compulsory income contributions
  • Not all debts are cleared under bankruptcy
  • Bankruptcy impacts your credit file and may impact future financial decisions such as loan applications
  • Permanent listing on the National Personal Insolvency Index (NPII)

The Trustee may need to sell off assets in order to recover funds and pay off creditors. Once the Trustee is appointed, the Bankrupt has legal obligations to disclose any change in circumstances that may impact the situation. This includes providing information such as bank statements, files and other records that the Trustee requests.

In addition, entering bankruptcy may also have an effect on your income, employment and business. If you earn over a certain threshold, you may need to make compulsory payments to your Trustee. If you lose your job, have a change of employment or if there is a change of income, these circumstances must all be communicated with the Trustee.

Entering bankruptcy does not necessarily clear or exempt you from all debts. There are exclusions to the debt relief under bankruptcy, including court penalties or fines, child support, Government student loans, debts incurred after the bankruptcy begins and debts that are undecided between the bankrupt and the creditor (also known as unliquidated debts).

There are also secured debts (or debts that are tied to assets) that need to be managed. This includes instances such as a mortgage over a house where the secured creditor (commonly a bank) has the security over the property. If a bankrupt is not making the repayments, the secured creditor has the right to take possession of the property they have the security over. A bankrupt must comply with the secured creditor during asset recovery. Learn more about property in bankruptcy here.

There are also other types of debt including joint debts, company debts and overseas debts, all of which are treated individually. It is your obligation to disclose all debts and creditors as part of your bankruptcy.

For more information on the consequences of bankruptcy in Australia, contact one of our professionals.

For more common bankruptcy FAQs, click here.

How can SV Partners help?

If you are in a situation where you may be facing bankruptcy, SV Partners can help you. Our professional team can assess your situation and provide solutions to manage your financial difficulties.

Our role is to provide objective and practical solutions that are tailored to your situation, ultimately offering relief from debt and financial pressures.

We are experts in all facets of bankruptcy. Our team is approachable and makes every effort to ensure the bankruptcy process is transparent and manageable. Visit our FAQ section for more information. For an obligation free consultation with a bankruptcy expert, contact us today, or reach us on our confidential assist line on 1800 246 801.

How can SV Partners help?

If you are in a situation where you may be facing bankruptcy, SV Partners can help you. Our professional team can assess your situation and provide solutions to manage your financial difficulties.

Our role is to provide objective and practical solutions that are tailored to your situation, ultimately offering relief from debt and financial pressures.

We are experts in all facets of bankruptcy, voluntary administration and creditors' voluntary administation. Our approachable team make every effort to make the bankruptcy process as transparent and manageable as possible. Visit our FAQ section for more information. For an obligation free consultation with a bankruptcy expert, contact us today, or reach us on our confidential assist line on 1800 246 801.