Bankruptcy
8. Bankruptcy Implications
Firm / Chambers:
Last updated: 22 Jun 2015
- Sometimes there is no better alternative to bankruptcy. There are two ways you can become bankrupt:
- voluntarily by lodging a debtor’s petition; or
- involuntary by lodging a creditor’s petition.
- If you are not in a position to pay your debts or negotiate suitable arrangements with your creditors you may elect to lodge a debtor’s petition (an application to become bankrupt) and initiate voluntary bankruptcy.
- A creditor to whom you owe $5,000 or more may apply to the court for a bankruptcy order against you if you are unable to pay your debt or negotiate an arrangement with your creditor. This will typically be the Federal Circuit Court.
- The consequences of bankruptcy are serious. You should seek independent legal advice before lodging a debtor’s petition. Our free Find a Lawyer directory may help put you in touch with the assistance you need.
- Regardless of whether you are bankrupted voluntarily (by debtor’s petition) or involuntarily (by creditor’s petition) the outcome and consequences are the same. Bankruptcy can have profound implications for your:
- assets;
- employment and income;
- debts;
- ability to travel overseas; and
- ability to obtain credit.
- It may be difficult for you to borrow money or purchase goods or services on credit including:
- rental accommodation;
- electricity;
- water; and
- telephone.
- Some banks may not allow you to open an account or may otherwise limit how you can use your account.
- If you apply for credit above a certain amount you are obliged to inform the credit provider that you are bankrupt.
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