How to apply for bankruptcy in Australia (debtor's petition)
In Australia, you apply for voluntary bankruptcy (a debtor's petition) by lodging a Bankruptcy Form (Statement of Affairs and Debtor's Petition) with the Australian Financial Security Authority (AFSA). Bankruptcy is governed by the Bankruptcy Act 1966 (Cth) and typically lasts 3 years from the date of acceptance.
The framework
Bankruptcy in Australia is governed by the Bankruptcy Act 1966 (Cth) and the Bankruptcy Regulations 2021 (Cth). The Australian Financial Security Authority (AFSA) administers the system.
The process
Consider the alternatives first
Before bankruptcy, consider a Debt Agreement (Part IX), a Personal Insolvency Agreement (Part X), informal hardship arrangements, or speaking with a financial counsellor on 1800 007 007 (free National Debt Helpline).
Get free financial counselling
A financial counsellor can help you assess the alternatives, negotiate with creditors, and access hardship arrangements. The service is free, independent, and confidential.
Understand the consequences
Bankruptcy affects your credit (recorded for 5 years from acceptance, or 2 years after discharge — whichever is later), restricts overseas travel, may affect employment, and most assets vest in the trustee under section 58.
List your assets and liabilities
Prepare a complete list of debts, creditors, assets (including superannuation, vehicles, real estate), income, and expenses. The Statement of Affairs requires full disclosure under section 6A.
Complete the Bankruptcy Form
Complete the AFSA Bankruptcy Form online via the AFSA Online Services portal. The form combines the Statement of Affairs and Debtor's Petition under section 55 of the Act.
Lodge with AFSA
Submit the form online to the Official Receiver at AFSA. There is no application fee for a debtor's petition. You will receive an acknowledgment shortly after lodgement.
Acceptance and trustee appointment
AFSA reviews and either accepts or rejects the petition. On acceptance, you are bankrupt and a trustee is appointed (the Official Trustee or a registered private trustee).
Cooperate with the trustee
Provide records, attend interviews, and disclose any change of address, income, or assets. Failure to cooperate can extend bankruptcy under section 149 to up to 8 years.
Income contributions
If your income exceeds the threshold under section 139K, you must pay contributions to the trustee for distribution to creditors. The threshold is indexed and depends on dependants.
Discharge after 3 years
Bankruptcy ends automatically 3 years and 1 day after acceptance, unless objections are filed by the trustee. Discharge releases you from most pre-bankruptcy debts under section 153, with limited exceptions (HECS, court fines, child support).
Forms and templates
- AFSA Bankruptcy Form (Statement of Affairs / Debtor's Petition)
- National Debt Helpline (financial counselling)
Common mistakes
- Not exploring alternatives first
- Hiding assets or providing incomplete disclosure
- Not understanding the long-term credit and travel impact
- Missing income contribution obligations
- Travelling overseas without trustee permission
Get this process right with Quillio
Quillio can help structure a Statement of Affairs, list creditors and assets, and identify available alternatives such as Part IX or Part X arrangements. See /practice-areas/insolvency or start a free trial.
This guide is general information, not legal advice. Bankruptcy has serious long-term consequences. Speak with a free financial counsellor or insolvency lawyer before lodging.
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