Frequently Asked Questions

I had so many questions when I was looking at bankruptcy and you probably do too. Check if the answers are here …

Does my debt go away?

As soon as you become bankrupt, all debts covered by your bankruptcy are gone forever. There are no conditions, its absolute.

Having said that, I recommend that you take a step back and have a think about whether you should pay some of your debts (without using credit). I have prepared a checklist below, to help you consider whether it is in your best interest to let all of your debts be removed by bankruptcy.

  • Do you need to pay your outstanding rent to ensure you have accommodation?
  • Do you need to pay your electricity and gas bills for continued heating and lighting?
  • Do you need to pay your telephone bill to keep your telephone number and internet service?
  • Do you need to pay your traffic fines to be able to keep your driver’s licence and register your car?
  • Do you need to continue to keep paying the monthly loan payments on your car to be able to have transport?

I hope this helps you. I recommend you work out how your life will work once you become bankrupt. I did this and it made the process much easier for me. If you have any questions please call me on 1300 794 492 or

I also recommend you read ‘Types of Debt’ on this website as it details debts that are not covered by bankruptcy.

How much can I earn – and how much can I keep? 

If you thought you would lose most of your wages by going bankrupt, stop worrying. The bankruptcy law ensures you have enough money to live on.

During bankruptcy, you can earn a minimum of around $1,112 per week (after tax), if you don’t have dependants. That amount can rise to $1,513 depending upon how many dependants you have. Also, this amount is after child support, if that’s your situation.

Your income up to these amounts is yours for you to spend. If you are in the fortunate position to be earning in excess of these amounts – and good luck to you if you are – the good news is that you get to keep half of the after tax excess amount as well.

I was surprised when I realised how much money I would have to live on during my bankruptcy. It is very fair. If you need to have a chat about your circumstances please give me a call on 1300 794 492 or email

Can I keep my assets? 

The answer is yes you can – within limits – if you decide to go bankrupt. You can keep your car up to auction value of $7,900, your furniture and ordinary household items, or anything realistic that is needed by your dependants. You can also keep the tools you need for work up to an auction value of $3,750 and any asset you hold in trust for someone else.

Staying living in your family home can be a bit more complicated. It will require the co-owner, a family member or friend buying your house for you to keep living in it. The good news is that this can be explored with the Bankruptcy Trustee before a decision by the Trustee is made regarding the sale of the home.

There is more information on this in the section ‘Can I Own Anything’. If you would like to explore your options regarding the possibility of remaining living in your home, give me a call on 1300 794 492 or email me at and we can have a chat.


Shares and investments such as boats and caravans will be sold by the Trustee and the proceeds put into your bankrupt estate (bucket). The good news is that your super that has accumulated over time is safe.

Can I keep my car?

Most of the time, yes, because in almost all the cases I see, the debt is more than the car is worth. Your car can have an auction value or equity up to $7,900 in bankruptcy. There is more information on this in the section called ‘Can I own anything?’. If you do want to keep it, check that all the payments are up-to-date before you file for bankruptcy and from then on.

Do I have to go bankrupt because I can’t pay my debts?

If you have debt which you cannot pay, your creditors can go to Court and get an order for the sheriff to come and take your possessions and sell them, garnishee your wages, have you examined before the court or make application for you to become bankrupt. My advice is to take control and take positive steps yourself to finalise your debt one way or another.

There are other alternatives to bankruptcy including debt agreements and personal insolvency agreements. Personally, I don’t like them because I think they keep continued financial pressure on the individual and don’t release you from your debt until the agreement is fully complied with. This could take many years. Bankruptcy releases you from your debts as soon as you become bankrupt and lasts for 3 years. It lets you get on with your life far quicker and gives you more money for day to day living with less financial pressure.

If you are already in a Debt Agreement or Personal Insolvency Agreement and want to go bankrupt instead, please call me on 1300 794 492 or email with your information, and let’s work together to get you back on track.

I need to go overseas. Is that possible?

The short answer is yes. See the section called ‘Can I travel’.

I’ve heard creditors can garnishee my wages. Is that true?

Once you have declared bankruptcy, the answer is no. Your income cannot be garnisheed by your creditors.

If you are not bankrupt and your creditors want to garnishee your wages, they have to take you to court. If you are concerned about a creditor garnisheeing your wages, you should consider going bankrupt and stop them in their tracks.

Will my boss find out?

No – unless you owe your boss money when you declare bankruptcy. If this is your situation, your boss is a creditor and will be officially notified of your bankruptcy.

The only other way your boss might find out is if you have shares in your boss’ business. When your Trustee deals with these shares your boss will become aware of your bankruptcy.

What are the downsides to bankruptcy?

You cannot have investments or assets during the 3 years of bankruptcy. Windfalls, lottery wins and inheritances received during bankruptcy will also go into your bankrupt estate (bucket).

Your credit rating will have a mark against it for five years. However, most of the people I work with say they already have a bad rating.

Another downside is that your name and details with be on the government’s National Personal Insolvency Index for life, unless there is a real risk to your safety. However, I never found this to be a problem.

During the three years of bankruptcy you have the inconvenience of obtaining the Trustee’s written permission for your overseas travel.

I gamble. How much trouble am I in?

No-one I know who has a gambling problem has gone to prison. 

There’s some information on the government’s bankruptcy website (; Practice Statement 6) which says a problem gambler won’t be persecuted, as long as they haven’t financed their gambling habit with criminal activities.

If you have concerns, give me a call on 1300 794 492 or email and I will go through it with you.

Can I offer to pay my debts once I go bankrupt?

So many people tell me they want to pay their debts but just can’t do it right now. As far as I’m concerned, if you want to repay what you owe after you have become bankrupt, that is totally your call. My opinion is that you should put the past behind you and focus on your life going forward, but I do understand that you may have a different opinion to me.

Once you become bankrupt you will find that bankruptcy changes the whole state of play. The debt is no longer yours, so your creditors and their debt collectors can no longer contact you and dictate terms – they can only talk to the Trustee. I recommend that you settle into the new bankruptcy life before you make any decisions.

If you would like to have a chat about this please call me on 1300 794 492 or email

Can the Court send me bankrupt?

Yes – your creditors can make application to the court to make you bankrupt. (see section – Help! My creditors are taking me to Court). If this is happening I recommend that you give me a call on 1300 794 492 or email to discuss the process and your options.

If the court has already declared you bankrupt, the three years of your bankruptcy does not start until your paperwork, that is your Statement of Affairs is lodged with AFSA. If this is your situation I recommend that you call  me on 1300 794 492 or email with the details of what has happened, and I will get the paperwork underway. It will save you a world of pain.

The fee is $300 including GST.

What happens if I’m a company director?

You could have a problem with the Tax Office if you receive a ‘Director Penalty Notice’. That means Tax Office is pursuing you for the unpaid PAYG tax and employee superannuation contributions that the Company owes. Bankruptcy solves this problem for you, the monies become owing by the bankrupt estate ‘bucket’.

Once you have declared bankruptcy, you can’t be a company director. ASIC has a form that must be completed and lodged once you become bankrupt – it’s Form 296, Notification of Disqualification from Managing Corporations – Bankruptcy or Personal Agreement. Nicholls & Co, have this form available on their website here.

If you are the only director of the company, it cannot trade once you are disqualified. ASIC will deregister the Company without involvement from you.  If you own a proprietary limited company (with assets) that needs winding up, you will need a company liquidator. I can help with this. Call me on1300 794 492 or email and I will point you in the right direction.

Do I have to be in the country to go bankrupt?

If you are not in Australia and want to file for bankruptcy, it is not always straightforward. You need to be;

  • resident in Australia, or
  • have a house or business in Australia, or
  • be carrying on business in Australia

If your circumstances are not straightforward, I would suggest the smart move is to email the Australian government’s bankruptcy service ( with details about your situation and ask. Once you know, call 1300 794 492 or email and we’ll get the ball rolling.

From my experience, you have to be able to establish your connection with Australia. If you have trouble establishing that connection, I would suggest we still get your paperwork started. We can lodge it once you are back in the country, if that is what AFSA require.

Once bankrupt, if you have to head overseas again, my advice is to organise yourself to be declared bankrupt and then ask your Trustee for permission to travel. I suggest you allow at least two weeks for the permission process.

Anything else I should know?

Yes, I recommend you read this website and write down any further questions you might have. That way when you call I can answer all of your queries, to enable you to make an informed decision on whether bankruptcy is the right solution for you.

If bankruptcy is the correct solution for you, once bankrupt, your creditors and their debt collectors will leave you alone, and you can get on with your life.

If you would like to discuss bankruptcy further call me 1300 794 492 or email Rest assured, there is a way forward.

So, how does it all happen?

Please read ‘How to apply for Bankruptcy’ on this website. I can help you to get started, all you have to do is give me a call on 1300 792 492 or email and I will get the ball rolling for you.

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