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We Specialise in Personal Bankruptcy in Australia

Declaring Bankruptcy in Australia

Declaring Bankruptcy in Australia is a way to eliminate your debt, relieve yourself of financial stress and get on with your life – debt free.

Filing for bankruptcy is often the last resort for people struggling with severe debt.

There are a number of bankruptcy regulations in place to deter people from declaring bankruptcy. Often the benefits of eliminating your debt outweigh the potential restrictions temporarily imposed on your lifestyle.

Revive Financial are Australian bankruptcy specialists. Our team consists of fully qualified chartered accountants and Registered Bankruptcy Trustees.

We have the skills and experience required to see you through your entire Bankruptcy. From completing and submitting the bankruptcy forms, to overseeing your bankruptcy through to completion.

Our extensive knowledge of the Bankruptcy process means we can help you declare bankruptcy and keep your house. You can also navigate your bankruptcy period with very little impact on your life.

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Success Story: Declaring Bankruptcy and Keeping your House

Brad and Tracey are married and shared equal parts ownership of their family home worth $550,000. They had been able to pay $50,000 off their mortgage before Brad had to declare bankruptcy due to his business failure.

Brad and Tracey wanted to keep their family home in a bankruptcy so they approached Revive Financial to declare bankruptcy with a Private Bankruptcy Trustee.

After an initial consultation, the Private Bankruptcy Trustee assessed Tracey and Brad’s situation and was able to make recommendations of the most appropriate course of action.

The couple had $50,000 equity in their mortgage. Because Brad and Tracey owned equal shares of the home, the trustee was able to make Tracey an offer to purchase Brad’s equity in the property for $25,000.

Tracey was able to accept and the Bankruptcy Trustee transferred all rights and title of the property to Tracy.

Success Story - Declare Bankruptcy and Keep your House

Tracey was now the sole owner of the property and solely responsible for making the mortgage repayments. This allowed Brad and Tracey to keep their family home during bankruptcy.

How to Declare Bankruptcy

Step 1: Talk To A ReVIVE Financial Bankruptcy Specialist

Step 1: Talk to a ReVIVE Financial Bankruptcy Specialist

If you’re struggling with debt, declaring bankruptcy is one of the more extreme options and often isn’t the only thing you can do. You may be able to reduce your debt or make payments more manageable through debt consolidation, informal negotiations, or formal debt agreements.

Speaking to a Revive bankruptcy specialist in a free consultation will help you understand your financial position and if declaring bankruptcy is the right option for you.

Step 2: Lodge The Bankruptcy Forms

Step 2: Lodge the Bankruptcy Forms

You’ll need to fill out and lodge the following two bankruptcy forms. Form 3 and Form 6.

These bankruptcy forms can be obtained and lodged on the AFSA website or by your registered bankruptcy trustee. They’ll ask questions about your current financial status.

Step 3: Confirm Your Bankruptcy Number

Step 3: Confirm Your Bankruptcy Number

Once you or your registered bankruptcy trustee has lodged the forms, you will be officially bankrupt within 48 hours, confirmed by a letter from AFSA with your bankruptcy number.

Your creditors are no longer allowed to make claims against you or your property, and you will be registered on the National Personal Insolvency Index.

Regulations of Bankruptcy

Bankruptcy is not a punishment, but rather, a way someone suffering with extreme debt can wipe the slate clean and start over. However, with that being said, there are a number of restrictions and regulations involved in Bankruptcy which may have an impact on your lifestyle.

Bankruptcy and your Income

There is a Bankruptcy Threshold placed on your income however, you are still able to earn over this amount. There is no limit on the amount you can earn while you are bankrupt. But once you reach a set amount, anything earned over that amount will be garnished.

That means 50c from each dollar over the set amount earned will be taken from you and used to pay for the cost of Bankruptcy or divided amongst your creditors. If you earn more than the set threshold, the amount you owe will be calculated and taken at the end of the financial year, in one lump sum.

If you earn less than the set threshold, bankruptcy won’t have an impact on your income.

Bankruptcy and your credit file

Currently, your bankruptcy will be noted on your credit file for a total of 5 years. You will be marked as a bankrupt for the period of bankruptcy (generally 3 years). Then it will be noted for a further 2 years that you are a discharged bankrupt.

If you fail to comply with the rules of Bankruptcy set out by your Trustee, they might apply to extend your bankruptcy. Your bankruptcy could be extended up to 8 years. If this is the case, it will be noted on your credit file for 8 years, then a further 2 years as a discharged bankrupt.

Your name will be noted on the National Personal Insolvency Index for life. This is a register of insolvent individuals which can be accessed by anyone (mostly banks) for a small fee. Generally, people will only check this register if you are applying to be a director of a large company or if you are applying for an expensive loan.

Bankruptcy and your Assets

Assets, such as your house, vehicles, tools and other things of value can be used in Bankruptcy to claw back some money you owe to creditors. However, it is unreasonable to think people can survive without transport and tools of trade, so the restriction on your assets is actually quite reasonable.

A bankrupt may still own a car, as long as it’s value is within a set amount. They may also keep tools used for work up to a set amount. General household items such as furniture, white goods and accessories are not considered as valuable assets and will not come into consideration in your bankruptcy. Windfalls such as lottery wins and inheritances will be taken and distributed to your creditors.

A bankrupt is not legally allowed to own property. Unfortunately, your family home is not a protected asset and the trustee needs to release any equity in the property once the mortgage and selling costs are paid. There are some legal ways you can keep your property in your family during the course of your bankruptcy. Ask us how.

Bankruptcy and travel

When you declare bankruptcy, you must surrender your passport to your Trustee. However, this doesn’t mean travelling is off limits.

If you need to travel overseas, you can apply to your Trustee who will set a court appointment with the judge. This process has a non-refundable $150 application fee. You must appear before the judge and your trustee and explain why you need to travel overseas. Your application will either be approved or denied.

If approved, you will be allowed to travel overseas, but you must stick to the itinerary you outlined in your court appointment.


There is no limit to the number of times you can declare bankruptcy. If you have been bankrupt before and have found you are once again in a position where you are struggling with your debt, you may declare bankruptcy again.

After you declare bankruptcy, you are sent a Bankruptcy Number which you may then quote to your creditors when they call. Your Bankruptcy Trustee will work with you to ensure you comply with the Bankruptcy Regulations.

To do this, they may take possession of any assets – such as your car or property and sell them to distribute the profits amongst your creditors. You must comply with these bankruptcy regulations for a period of 3 years or until you are discharged from your bankruptcy.

An individual may declare voluntary bankruptcy. To declare bankruptcy, you must complete Form 3 and Form 6 and submit them to AFSA along with the required supporting documents. It is possible to download these forms from AFSA and complete them yourself.

However, if you are finding the process daunting or you would like to draw on decades of bankruptcy knowledge and experience, you could employ Revive Financial to assist you.

It is also possible for a creditor to force you into bankruptcy through a bankruptcy sequestration order. If you have been made bankrupt through a sequestration order, your appointed bankruptcy trustee will be in touch to begin the bankruptcy and ensure you comply with the bankruptcy regulations. You may decide to challenge a sequestration order by seeking a review in court.

There is no set debt amount required to qualify for bankruptcy. However, you should consider the bankruptcy regulations and consequences of bankruptcy before you decide to declare bankruptcy.

If you are only struggling with a small amount of debt, the impact bankruptcy might have on your life may far outweigh the benefits of eliminating the debt.

No, you may not be a company director during the bankruptcy period. You are also unable to manage a company unless you have the permission of a court.

Filing bankruptcy is the act of declaring to your creditors that you don’t have enough wealth, either in cash or assets to repay the debts you owe.

So when you file for bankruptcy, a Trustee is assigned to you to enforce a number of restrictions, such as taking possession of and selling your assests, garnishing your wages and limiting overseas travel.

This is all done in a bid to recover some of the money you owe to your creditors. When the bankruptcy period is over, your debts are considered to be settled and creditors cannot pursue you for further payment of these debts.

Secured debts cannot be included in a bankruptcy.

Some examples include:
  • A loan secured against a vehicle (within the Indexed Amounts)
  • Radio Rentals
  • Centrelink Debts

You must maintain the repayments on these debts outside the bankruptcy. Failing to make payments on these debts may result in recovery action, repossession of the asset/s or garnished wages.

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