How Long Does Bankruptcy Stay On File Australia?

It is impossible to estimate how badly any individual’s credit score is impacted by bankruptcy. This is because the algorithms lenders utilise and credit reporting agencies are fully secretive. However, it’s safe to say a bankruptcy will have a largely negative impact on your credit rating.

Your credit report will note a bankruptcy for five years from the moment at which you made the declaration. This means your credit rating could be impacted by the bankruptcy for the exact same time period.

The best thing to do is to have your bankruptcy sorted out and closed in the smaller timeframe possible. Your credit report will display the bankruptcy for a five year minimum. However, depending on how long it takes you to discharge the bankruptcy, that period could end up being closer to a decade. The sooner you sort your bankruptcy out, the sooner you can getting your credit rating back in order.

How Long Does Bankruptcy Affect Me and Can I Get It Discharged Early?

The Australian Financial Security Authority advises that while bankruptcy will typically be discharged 3 years and 1 day after your declaration was accepted, you might be able to “annul” your bankruptcy situation. Annulment is the early cancellation of your bankruptcy. This can be done in one of the following three ways:
  1. Paying off all debts in full: This includes realisation charges, interest, and any expenses incurred or charged by your trustee.
  2. Arrange a “composition” with creditors: This is a negotiated agreement in which creditors accept a final payment that is lower than the number of your total debt.
  3. Provide in court that you should not have been forced into bankruptcy in the first place: The AFSA recommends you seek personal legal advice in order to move forward with this option.

If one of your outstanding loans is a credit card debt, you might be able to use a balance transfer (responsibly) to manage your repayments and make them easier to deal with.

Get On Top of It Now

In the event of declaring bankruptcy, there is truly no time to wait around. The longer you wait the more the situation declines, so it is best to get in contact with a professional bankruptcy advisor on what to do regarding your unique situation.

Understanding Bankruptcy is a trusted and reliable bankruptcy advisor who can provide you with the necessary information on what you have to do post-bankruptcy declaration. We lend a compassionate and caring ear as well as free, obligation-free advice on what to do next.

Call our team on 1300 794 492 or fill out an inquiry form on our contact page. We will get back to you as soon as possible and with all the information you require.

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