Bankruptcy.

What it Means in Australia ...

Bankruptcy, once associated with high-flying entrepreneurs, has now become an option for ordinary people who can't pay their debts. In the 1990s, the number of bankruptcies in Australia rose dramatically, and in 2001/2002, 24,109 individuals were declared bankrupt.

What is Bankruptcy?

Bankruptcy is when you cannot pay your debts and so declare yourself, or are declared by a creditor or creditors, to be insolvent, that is, without sufficient funds to cover your debts. Control of your finances is handed over to a registered bankruptcy trustee that arranges the sale of your assets and distributes the proceeds to your creditor(s).

If your debts are out of control and you have exhausted other legally available alternatives, bankruptcy might be your best course. You will generally be discharged after three years. Proper advice from a financial counsellor or the Insolvency and Trustee Service, Australia (ITSA), an agency of the Federal Attorney-General's Department, is essential.

Money Management for Women by Sheila Freeman and Helene Richards answers your questions on bankruptcy for Australians and all aspects of managing your personal finances ...

• Could some bankruptcies be avoided?
• How can I be made bankrupt?
• Can I change my mind?
• How much in debt must I be before I can go bankrupt?
• What is the usual period of bankruptcy?
• How do I get an early discharge?
• On what grounds could my bankruptcy be extended?
• If I am officially bankrupt, are all my debts gone?
• Can I borrow money while I am bankrupt?
• Will I lose everything?
• Once I have declared bankruptcy, do I get to keep my earnings?

Find out more here