Debt & Bankruptcy Lawyers › Personal Bankruptcy
Personal Bankruptcy Lawyers — Relief From Debt. A Fresh Start.
Voluntary bankruptcy under the Bankruptcy Act 1966 provides immediate relief from unsecured debts — stopping enforcement action, protecting necessary assets, and discharging most debts after 3 years. A bankruptcy lawyer advises on whether bankruptcy is the right option, what assets are protected and which vest in the trustee, the obligations during the bankruptcy period, and the steps to take to navigate bankruptcy with minimal impact on your life and livelihood.
⚠ Once a creditor obtains a judgment debt, they can issue a garnishee order over wages or bank accounts immediately. A bankruptcy filing creates an automatic stay on all enforcement action. Get urgent advice if enforcement action has commenced.
Personal Bankruptcy Matters We Handle
From voluntary bankruptcy filings to defending sequestration orders.
Voluntary Bankruptcy Filing
A debtor who cannot pay their debts can file a debtor's petition with AFSA (the Australian Financial Security Authority) — becoming bankrupt voluntarily. The petition is lodged online via AFSA's portal. A bankruptcy lawyer prepares the statement of affairs (listing all assets and liabilities), advises on the timing of the filing relative to any impending enforcement action, and manages the initial period of the bankruptcy to protect the debtor's interests.
Asset Protection Advice Before Bankruptcy
Before filing for bankruptcy, a lawyer advises on which assets are protected (exempt) under the Bankruptcy Act and which vest in the trustee. The protected assets include tools of trade (up to $4,200), a vehicle (up to $9,200), household furniture, superannuation, and certain personal injury compensation. The trustee can investigate and set aside transactions made before bankruptcy — so pre-bankruptcy planning must be done carefully and transparently.
Defending a Sequestration Order
A creditor owed $10,000 or more can apply to the Federal Circuit and Family Court for a sequestration order — making the debtor bankrupt against their will. A debtor who disputes the debt, disputes that they committed an act of bankruptcy, or can demonstrate solvency has grounds to oppose the sequestration order. A lawyer files the opposition, gathers the relevant evidence, and appears in the Federal Circuit and Family Court to oppose the order.
Bankruptcy Notice Challenge
A bankruptcy notice is the precursor to a creditor-initiated sequestration order — demanding payment of a judgment debt within 21 days. A debtor who fails to comply with the bankruptcy notice commits an act of bankruptcy. A lawyer advises on the grounds for challenging the bankruptcy notice (including a counterclaim, set-off, or cross-demand that equals or exceeds the judgment debt) and files the application to set aside the notice in the Federal Circuit and Family Court.
During Bankruptcy — Obligations & Management
During the 3-year bankruptcy period, a bankrupt has ongoing obligations — to disclose income and assets to the trustee, to notify the trustee of any change of address, to seek the trustee's consent before travelling overseas, and to make income contributions if income exceeds the threshold. A bankruptcy lawyer advises the bankrupt on their obligations, manages disputes with the trustee about income contributions and assets, and represents the bankrupt in any examination by the trustee.
Early Discharge Applications
A bankrupt is automatically discharged after 3 years (or 5 or 8 years if objections are filed by the trustee). A bankrupt who has complied with all their obligations can apply for an early discharge under s 149 of the Bankruptcy Act. A lawyer advises on whether an early discharge is available and prepares the application — including evidence of compliance with all obligations and the trustee's views on the application.
The Legal Framework
Bankruptcy law — Bankruptcy Act 1966 (Cth), administered by AFSA.
Automatic stay on enforcement — s 58(3) Bankruptcy Act
On the day a debtor is declared bankrupt, an automatic stay takes effect — preventing creditors from commencing or continuing enforcement action against the bankrupt. Garnishee orders are dissolved, writs of execution are stayed, and creditor proceedings in other courts are stayed. The automatic stay is one of the most valuable aspects of bankruptcy for debtors who are facing active enforcement action — it provides immediate breathing space and stops the enforcement spiral.
Protected (exempt) assets — s 116 Bankruptcy Act
Section 116 of the Bankruptcy Act lists the assets that do not vest in the trustee and are protected from realisation for the benefit of creditors. These include: tools of trade used by the bankrupt to earn income (up to the threshold value, currently $4,200); a vehicle used for transport (up to $9,200); household furniture, clothing, and personal effects; superannuation; compensation for personal injury; and life assurance policies. A lawyer advises on which of the debtor's specific assets fall within the protected categories before the bankruptcy filing.
Voidable transactions — ss 120–122 Bankruptcy Act
The bankruptcy trustee has the power to investigate and set aside certain transactions made before bankruptcy. Section 120 allows the trustee to set aside transfers of property at undervalue to related parties within 4 years before bankruptcy (or 2 years for unrelated parties). Section 122 allows the trustee to set aside preferences paid to creditors within 6 months before bankruptcy. A lawyer advises on the voidable transaction rules before any pre-bankruptcy steps are taken.
Income contributions — ss 139K–139ZG Bankruptcy Act
A bankrupt whose income exceeds the applicable threshold (set by AFSA, adjusted annually — approximately $65,000 per year for a single person without dependants) must make mandatory income contributions to the trustee for the benefit of creditors. Contributions are set at 50 cents in the dollar of income above the threshold. A lawyer advises on the calculation of the income contribution, on disputed income assessments, and on the bankrupt's obligations to disclose all sources of income.
The family home — 3-year trustee window
Where a bankrupt has an interest in the family home, the property vests in the trustee. The trustee has 3 years from the date of bankruptcy to deal with the property (sell it, commence proceedings, or obtain the bankrupt's consent to a sale). If the trustee does not act within 3 years, the bankrupt's interest re-vests in the former bankrupt. A lawyer advises on the 3-year window, the spouse's interest in the property, and the options for negotiating with the trustee to buy back the bankrupt's interest.
Credit file impact — NPII and credit reporting
A bankruptcy is recorded on the National Personal Insolvency Index (NPII) permanently — the NPII is a public, searchable register administered by AFSA. In addition, the bankruptcy is recorded on the bankrupt's credit file for 5 years from the date of discharge (not from the date of bankruptcy). This means that for most bankrupts (who are discharged after 3 years), the credit file entry lasts for 8 years from the date of bankruptcy. A lawyer advises on the credit file implications of bankruptcy and on the alternatives that may have a lesser credit file impact.
How It Works
One request. Free personal bankruptcy advice.
Tell us the total debt, the main creditors, whether you own property or a vehicle, your employment, and whether any enforcement action has commenced. A bankruptcy lawyer will advise on all options.
Submit Your RequestDescribe the debt situation
Total debt, main creditors, assets (property, vehicle, superannuation), current income, employment type, and whether any creditor has obtained a judgment or commenced enforcement action.
Matched to a bankruptcy lawyer
Matched to a bankruptcy lawyer with experience in the Bankruptcy Act — who can advise on whether voluntary bankruptcy, a Part IX debt agreement, or informal settlement is the right option for your circumstances.
Free consultation
A bankruptcy lawyer contacts you for a free consultation — advising on the consequences of bankruptcy, asset protection, income contribution obligations, and the realistic timeline for financial recovery.