There are a number of reasons people might struggle to meet their financial obligations including:

• sudden unemployment;
• ill health; or
• relationship breakdown.

If you are becoming overwhelmed with debt or are considering bankruptcy or any of the other formal options that exist under Australian law you should seek legal advice as soon as possible. A lawyer can help you understand bankruptcy. They can also explain the legal consequences and compare the available alternatives such as a debt agreement or personal insolvency agreement.

The consequences of bankruptcy are severe. Both during and after your bankruptcy you will face significant financial obligations and restrictions. While you will find useful legal information on bankruptcy and other formal debt management options in this legal guide it is also important that you seek independent legal and financial advice based on your particular circumstances.

If you are thinking of applying for bankruptcy by lodging a debtor’s petition a lawyer can:

• explain the debtor’s petition process including eligibility requirements;
• explain the consequences of bankruptcy;
• explain the alternatives to bankruptcy such as negotiating with your creditors;
• help you to complete and lodge a declaration of intention (DOI) to present a debtor’s petition; and
• assist you to complete and lodge your debtor’s petition (your application to become bankrupt) and the statement of affairs that must accompany it.

If you have been served with a creditor’s petition a lawyer can:

• explain the consequences of a sequestration order (order declaring you bankrupt) being made;

• explain the court process to you including how to defend the proceedings; and
• with the court’s permission represent you in court proceedings.

If you wish to avoid bankruptcy but are interested in one of the formal arrangements set out in the legislation a lawyer can:

• explain the formal arrangements to you;
• explain what you and your creditors can and cannot do under each arrangement; and
• provide advice regarding the most appropriate arrangements in light of your particular situation.

If you are in serious financial difficulty but wish to avoid the formal arrangements set out in the legislation a lawyer can:

• advise you of your options;
• help you renegotiate payments with your creditors;
• assist you with any recovery action commenced or threatened by your creditors; and
• provide you with advice regarding government assistance.