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Bankruptcy

Definition of 'Bankruptcy'

One of the best known types of insolvency, bankruptcy is an option available to those who can’t afford to pay their debts as they fall due.

Bankruptcy effectively wipes the slate clean, gives protection from pressing creditors, and enables struggling borrowers to make a fresh start. On the other hand, bankruptcy nukes your ability to get credit, as the bankruptcy order will continue to show on your credit report for 7 years, even if you are discharged earlier than this.

It costs $470 to apply for your own bankruptcy. Creditors will no longer be able to pursue you, and you could be discharged from your bankruptcy within 3 years.

A bankruptcy can be administered by a Registered Trustee or by the Australian Financial Security Authority (AFSA) who will sell any assets you have (including your home) to pay your creditors after paying costs. There is also an earnings threshold above which you will be legally obliged to pay a contribution to your creditors under the bankruptcy.

But you will wipe the slate clean, and free yourself from creditors, except HECS (Higher Education Contribution Scheme) debts, student supplement loans and maintenance payments and child support.

Use the links below to locate the term you are looking for. If you can't locate it, please get in touch.

Credit Jargon Starting 'G'

Credit Jargon Starting 'I'

Credit Jargon Starting 'J'

Credit Jargon Starting 'L'

Credit Jargon Starting 'M'

Credit Jargon Starting 'S'

Credit Jargon Starting 'T'

Credit Jargon Starting 'V'

Credit Jargon Starting 'W'

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