Who must comply with Personal bankruptcy declaration or debt agreement?

Individuals with unmanageable personal debt can voluntarily petition for bankruptcy via AFSA.

The Bankruptcy Act 1966 is administered for individuals by the Australian Financial Security Authority (AFSA); corporate insolvency sits with ASIC. A person can apply for voluntary bankruptcy by lodging a Debtor's Petition and a Statement of Affairs together, or a creditor owed $10,000 or more can apply to the court for a sequestration order. Bankruptcy lasts at least 3 years and 1 day and releases the bankrupt from most debts. A trustee (a registered trustee, or the Official Trustee at AFSA) is appointed, notifies creditors, can sell certain assets and can require income contributions above a set threshold. The bankrupt must disclose debts, income and assets, report changes, and disclose the bankruptcy when seeking credit above a set amount or trading under another business name. Other formal options are temporary debt protection (21 days), a debt agreement and a personal insolvency agreement.

Applies only if you cannot pay your debts as they fall due. Whether it applies turns on a fact that no industry, structure or size settles on its own.

How the regulator frames it: Individuals (including joint and partnership applicants) who apply for or are made bankrupt, and creditors using the bankruptcy notice and creditor's petition process. AFSA does not handle corporate insolvency.

What triggers it: An individual being unable to pay their debts and applying for bankruptcy, or failing to comply within 21 days with a bankruptcy notice based on a final judgment of $10,000 or more (an act of bankruptcy that supports a creditor's petition).

Jurisdiction: Commonwealth law, so the test is the same in every state and territory.

Outcome across the 35 industries Rules Mate maps (35 of 35: no).

The answer is the same in every industry: no. Industry does not change who must comply.

Structure does not change the answer across all industries: for every structure the answer is "no".

Size does not change the answer across all industries: at every size band the answer is "no".

Each line is one run of the Rules Mate applicability engine for a single business profile, with the reason the engine gives:

• Pty Ltd company in real estate agents with 6–19 employees, turnover $1M–$3M: does not apply. Requires a trigger outside this questionnaire.

The engine shows this obligation as "check whether this applies" when a business has a sole trader and financial distress / winding down. It then applies only if you cannot pay your debts as they fall due. That fact is not something Rules Mate can infer from industry, structure or size.

When due

Debtor's Petition and Statement of Affairs submitted together (joint applicants on the same day); where a creditor made the person bankrupt, the Statement of Affairs within 14 days of notification; changes of name, address, income or employment reported to the trustee during the bankruptcy; a bankruptcy notice must be served within 6 months of issue and complied with within 21 days of service.

Frequency

When a triggering event occurs

Evidence to keep

Debtor's Petition and Statement of Affairs listing all debts, assets and income; any Trustee Consent to Act Declaration; income and mortgage statements and other financial information requested by the trustee; records of income contributions paid; notices of changed circumstances.

Status

Current

Priority

High

Maximum penalty: AFSA notes there may be penalties for not complying with a bankrupt's obligations and restrictions, and the trustee may extend the bankruptcy. Bankruptcy offence penalty amounts were not verified for this entry; check the Bankruptcy Act 1966 on legislation.gov.au.

Rules Mate has not yet classified the audit or assurance level for this obligation. Any audit, review or certification requirement is set by the regulator source listed below.

Rules Mate tracks 5 published obligations tagged "insolvency", 3 of them rated critical. For a professional services Pty Ltd company with 6–19 employees operating in every state, 1 of those apply outright. This obligation is rated high priority and carries criminal liability, and is triggered by events.

Regulated by Australian Financial Security Authority.

AFSA: Federal agency administering personal insolvency + PPSR (Personal Property Securities Register).

• Australian Financial Security Authority

Bankruptcy Act 1966: Federal personal insolvency law.

• Bankruptcy Act 1966

Free tools that help with this obligation:

• Compliance calendar builder