Personal bankruptcy declaration or debt agreement
Individuals with unmanageable personal debt can voluntarily petition for bankruptcy via AFSA.
Who must comply
Individual debtors unable to pay debts as they fall due.
What triggers it
Insolvency at the individual level.
When due
Voluntary or upon creditor's petition.
Evidence required
Statement of Affairs lodged with AFSA; income disclosure.
Max penalty
Concealment of assets or other bankruptcy offences attract criminal penalties
Summary
Bankruptcy Act 1966 governs personal insolvency. Debtor's petition (voluntary bankruptcy) or creditor's petition (forced). Discharge typically 3 years; trustee administers + may seek income contributions. Alternatives include Part IX debt agreement (less destructive) + Part X personal insolvency agreement.
Enforced by
Source legislation
Topics
Related obligations
- CWLTHPrevent insolvent trading (s 588G)Directors must prevent the company incurring debts while insolvent — or face personal liability.
- CWLTHAppoint voluntary administrator under Part 5.3A Corporations ActDirectors can place company in voluntary administration when insolvent — pause creditor claims for restructuring window.
- CWLTHRegister security interests on the PPSRSecured creditors must register on the Personal Property Securities Register to preserve priority.
- CWLTHSimplified Debt Restructuring (small business)Small companies (<$1M liabilities) can use SDR to restructure without full external admin.
Frequently asked questions
- Who must comply with Personal bankruptcy declaration or debt agreement?
- Individual debtors unable to pay debts as they fall due.
- What triggers Personal bankruptcy declaration or debt agreement?
- Insolvency at the individual level.
- When is Personal bankruptcy declaration or debt agreement due?
- Voluntary or upon creditor's petition.
- What is the maximum penalty for Personal bankruptcy declaration or debt agreement?
- Concealment of assets or other bankruptcy offences attract criminal penalties
- What evidence is required for Personal bankruptcy declaration or debt agreement?
- Statement of Affairs lodged with AFSA; income disclosure.
Source: https://afsa.gov.au/insolvency/i-cant-pay-my-debts. Rules Mate is not a law firm. Always verify against the live regulator source before acting.