• What is bankruptcy?

    Bankruptcy is a legal declaration that an individual is unable to pay their debts.

    Individuals can file for voluntary bankruptcy (also known as a debtor’s petition) or they can be put into bankruptcy by a court (through a creditor’s petition Court application).

    People who become bankrupt are freed from most types of debt. However, they are still liable for five different types of debt:

    • Court penalties and fines
    • Child support and maintenance
    • Government student loans (HECS and HELP)
    • Debts where the amount owing has yet to be finalised
    • Debts incurred after the bankruptcy starts

    In Australia, only individuals can file for bankruptcy – not companies.

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