Does Bankruptcy Affect My Partner

How Does Bankruptcy Affect My Partner in Australia?

If your financial affairs are not interlinked with your partner, your partner will not be involved with your bankruptcy. Your partner’s financial circumstances will not be relevant to your bankruptcy.

Will Bankruptcy Affect My Partner 

If you own assets jointly with your partner/spouse or have joint liabilities, your partner will be involved in your bankruptcy regarding those issues. If your financial affairs are intertwined with your partner’s, then it is likely that they may be affected by your bankruptcy. Your creditors may try to pursue payment from both you and your partner even though only one of you has filed for bankruptcy. It is important to get advice as soon as possible if you think bankruptcy could affect your spouse or partner.

Bankruptcy Partner And House Ownership

If you own a house with your partner the Trustee of your bankruptcy cannot sell the house without your partner’s knowledge and consent. If your partner does not want the house sold, in these situations the Trustee of your bankruptcy will normally agree to your partner buying out the equity interest of the bankrupt estate in the property, with the existing mortgage remaining in place.

Jointly Financed Car And Bankruptcy

If you and your partner have jointly financed a car and the car is worth less than the amount owing, the monthly payments will have to continue to be paid, otherwise, the lender will repossess and sell the car. The lender will then pursue your partner for the total shortfall incurred on the sale of the car. The lender would not be able to pursue you and can only lodge a Proof of Debt Form with your bankrupt estate. 

Bankruptcy And Joint Assets

It is important to understand the implications that bankruptcy can have on any joint assets you may hold with your partner. In some cases, it may be beneficial for both parties to agree to a voluntary transfer of these assets into the sole name of one party in order to avoid having them become part of the bankrupt estate. You should always seek legal advice if you are considering this option as there are legal and tax implications associated with any asset transfers. 


In summary, if you and your partner jointly own a house or car prior to being bankrupt, the Trustee of your bankruptcy will not normally force a sale unless both parties agree. To protect your non bankrupt partner, if there is an existing loan against the asset then it must be maintained until either it is paid off in full or refinanced with another lender.

Questions About Will My Bankruptcy Affect My Partner?

We trust we have been of assistance in providing more information if you are looking for information about how bankruptcy affects my partner or wife. Everyone’s circumstances are different. If you would like to discuss your specific circumstances or concerns you are welcome to give us a call on 1300 794 492 or email:

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