Why consider Bankruptcy?
Bankruptcy can help you escape financial hardship and regain financial stability.
How Bankruptcy works
Bankruptcy is a legal process that can release you from your unsecured provable debts so you can make a fresh start:
You’re eligible for Bankruptcy if you can’t pay your debts as and when they fall due.
Take Revive’s free online assessment team to check your eligibility for bankruptcy and begin the process.
Our Success Specialists will clearly explain any costs before you move forward.
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Debt relief and a fresh start
You are freed of your obligation to repay your provable debts and have a clean slate from which to rebuild your finances.
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Creditor protection
Your creditors are notified of the Bankruptcy and unsecured creditors will stop pursuing you for payment of your debts.
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Ability to operate a business (with restrictions)
You may be able to continue to operate a business while Bankrupt, however if you trade under an assumed name (ie. Partnership or firm name) you must disclose that you are Bankrupt to everyone that you deal with. However, you cannot manage a company whilst a bankrupt.
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Retention of essential personal assets
You may keep most ordinary household or personal items as well as:
- Tools used to earn an income up to a set limit
- Vehicles, cars and motorbikes less than the set limit
- Funds kept in a registered & regulated superannuation fund
- Compensation for a personal injury
- Assets held by you in trust for another person (i.e. child’s bank account)
- Awards of a sporting, cultural, military or academic nature
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Restrictions on borrowing and disclosure requirements
You may have difficulty securing finance and must disclose your status as a Bankrupt when you borrow more than a set amount during the Bankruptcy period.
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Credit file impact
Your credit file will be impacted during the Bankruptcy period, plus a further two years.
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Permanent NPII listing
Your name will be listed on the National Personal Insolvency Index for life.
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Company management restrictions
You cannot be involved with the management of a company without the permission of the Court.
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Potential employment limitations
You may not be able to remain employed in particular trades or professions.
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Potential impact on licenses and certifications
Some certificates/licenses may be affected.
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Trustee control over certain assets
Your trustee may pursue current or future assets to benefit your creditors including:
- Houses, apartments, land, farm and business premises including leases
- Motor vehicles above a set limit
- Shares and other investments including shares held in your employer’s business
- Tax refunds for income earned before you became bankrupt
- Proceeds of a deceased estate where a person dies before or during your bankruptcy
- Lottery winnings and competition prizes
Bankruptcy helped this customer
See how we’ve helped Australians just like you take control of their debt and rebuild their financial future.
After placing his company into liquidation, Leigh faced losing his home and vehicle to debt – Revive helped him protect his assets and move forward.
The problem
Left with $60,000 in personal debt and at risk of losing his home and vehicle after his business failed.
The solution
Arranged a bankruptcy solution with a deed of forbearance, allowing him to make affordable payments while protecting his assets.
The outcome
Successfully discharged. Wiped over $45,000 in debt while keeping his home and vehicle safe.
Bankruptcy is a legal process that releases you from your provable debts, allowing you to make a fresh start. While it has some notable consequences, the positives typically outweigh the negatives. You’re eligible for Bankruptcy if you can’t pay your debts as and when they fall due, and you are present in Australia or have a residential or business connection in Australia. There’s no minimum or maximum amount of debt required to enter the Bankruptcy process.
The answer is typically “yes”, with permission, and your Revive Financial Success Specialist can provide further information. Travelling overseas without permission or staying for longer than your allowed time can result in your Bankruptcy being extended.
Yes, you can borrow money after your Bankruptcy ends in Australia, but it can be challenging. While you are officially discharged, the Bankruptcy will stay on your credit report for two years after discharge or five years from the start date (whichever comes later).
The Bankruptcy Act does not impose direct restrictions on employment, but certain industry associations and licensing authorities impose restrictions, should a member or licensee become bankrupt. You should check with your relevant licensing authority or professional organisation to determine any impact on your ability to continue in that trade or profession prior to applying for Bankruptcy.
Your employer should not be notified, however we recommend reviewing the terms of your employment to ensure you do not have any contractual obligation to remain solvent with your employer.
Your income will be capped depending on your situation (For example, the threshold for people with dependents is higher than the threshold for a single individual). Any money earned above the set threshold will become a contribution and be distributed among your creditors. If you are made redundant or receive a pay-out after losing your job, some of that money can also be made a contribution and distributed to your creditors.
Your house may be realised during the Bankruptcy if the value of that property (in excess of secured loans) can be used to satisfy any debt amounts included in the Bankruptcy.
You, your spouse/partner or another party may be able to purchase your share of the equity as an alternative to the trustee selling the property. The equity could be purchased through a lump sum amount paid to your Trustee, or could be paid through agreed installments during the Bankruptcy.
There are ways you may be able to keep your family home, and your Revive Financial Success Specialist can explain the options.
Yes. Bankruptcy and a Part IX (9) Debt Agreement are different formal insolvency options under the Bankruptcy Act, although both are designed to help people deal with unmanageable debts.
A Debt Agreement is a legally binding arrangement where you propose an affordable repayment plan to your creditors, often over several years. If creditors accept the proposal, you make regular payments and the remaining debt is typically cleared once the agreement is completed. Debt Agreements are available only if you meet certain eligibility thresholds for income, assets and debts.
Bankruptcy, on the other hand, is a legal process where most unsecured debts are cleared, but a Bankruptcy Trustee takes control of certain financial affairs for a period of time and there may be restrictions during that time.
Both Bankruptcy and Debt Agreements are regulated by the Australian Financial Security Authority (AFSA) under the Bankruptcy Act.
You can voluntarily apply for Bankruptcy directly through the Australian Financial Security Authority (AFSA) if you are unable to pay your debts as they fall due.
Before applying, it’s important to understand the consequences of Bankruptcy and consider all available options. Speaking with a Registered Bankruptcy Trustee can help you understand the process and determine whether Bankruptcy or another solution may be more suitable for your situation.
Revive Financial has Registered Trustees in Bankruptcy who can explain the process, answer your questions, and help you understand your options before making a decision.
Once your Bankruptcy is accepted by AFSA and your Bankruptcy begins, your creditors will be notified and contact will cease. Should you receive contact from any creditors after your Bankruptcy is accepted, you should simply provide them with your Bankruptcy number and end the call. If creditors persist, your trustee can address the creditor/s on your behalf.
Before you apply for Bankruptcy, seek qualified advice. Our Success Specialists will assess your debts and cover all of your options, from Debt Agreements and Personal Insolvency Agreements to Bankruptcy.
Navigating Bankruptcy can be complex, but you don’t have to do it alone. Revive Financial’s skilled team can guide you through the process, ensuring you find the most manageable solution for your unique situation. Our experts will work with you to craft a solution that alleviates your financial pressure and sets you on the path to a brighter financial future.
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