Declaring Bankruptcy Without a Lawyer

Are you experiencing financial hardship and considering declaring yourself bankrupt in Australia? You are not alone.

Everyone experiences financial strain at some point; even thriving households and businesses can experience unexpected hardship due to life changes, job loss or factors that are out of our control. Personal bankruptcies and insolvencies are at an all-time high in Australia.

Whilst bankruptcy may clear your unsecured debt, it is important to understand the consequences of declaring yourself bankrupt.

If you do decide to proceed with filing for bankruptcy, there’s a specific process to follow. You don’t need a lawyer to become bankrupt, however professional advice may be worthwhile.

Consequences of Bankruptcy

Before applying to become bankrupt, there are lasting consequences to consider. Firstly, the trustee of your bankruptcy may take certain assets to pay off creditors. This includes property interests, jewellery, stocks and shares, gifts from a will, cash held in financial institutions, household fittings and fixtures, and money that may be owed to the person who is bankrupt.

Declaring formal bankruptcy can have lasting negative impacts on your finances, specifically your credit rating and ability to borrow money in the future. Even after your bankruptcy has ended, a black mark on your credit file may severely restrict your financial earning capability for up to seven years.

Bankruptcy won’t absolve you of some debts, including spousal payments and child support. You will be responsible for any debts incurred after declaring yourself bankrupt. You will be permanently listed on the publicly accessible National Personal Insolvency Index (NPII). This listing will comprise your personal information, including your name, date of birth and address. Finally, you won’t be able to travel overseas without the approval of your trustee.

Declaring bankruptcy without a lawyer - Man signing papers

How to File for Bankruptcy Yourself

Once you have considered your alternatives, if you decide to file for bankruptcy, there are steps you need to follow:

  • Complete a Debtor’s Petition and Statement of Affairs. You will need the name, address, and amount owed to each of your creditors. You must show all debts for which you are liable, whether business or personal. You will need full details of your income and personal property (house, car, bank accounts, shares, and any money owed to you).
  • Deliver the documents to the Australian Financial Security Authority (ASFA). When the forms are accepted by the Official Receiver in Bankruptcy, you become bankrupt. The standard term is three years, however in some cases this can be increased to eight years.
  • You will then be informed by your trustee of your bankruptcy, the reference number to use in future correspondence.

Once you have been declared bankrupt, there are obligations you must undertake:

  • Inform the trustee immediately if you win any money or other prizes
  • Inform the trustee immediately if you become the beneficiary of a deceased estate
  • Inform the trustee immediately if you obtain any new assets (for example, a house or car)
  • Surrender your passport to the trustee if you are asked to do so
  • You will not be able to act as a director or manager of a company without the court’s permission
  • If any of your creditors hold valid security over any property and they take action to recover it, you must assist
  • You will remain liable for debts incurred after the date of your bankruptcy.

Alternatives to Bankruptcy

Bankruptcy is considered a last choice, and should only be undertaken when all other viable avenues for your debt repayment have been explored. Alternative debt relief solutions include consolidation loans, credit file and rating investigations, mortgage refinance loans, or formal or informal Debt Agreements.

For more information about filing for bankruptcy or exploring other finance management options, speak to one of our qualified and friendly staff for a free assessment.


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