Bankruptcy is a formal way to deal with debts you can't pay — it usually lasts three years, with real consequences and alternatives worth considering.
Bankruptcy is a legal process, administered by AFSA, for people who can't pay their debts. It normally lasts three years and one day. A trustee takes control of certain assets and can require income contributions above a threshold, and most unsecured debts are ultimately released.
It has real consequences: recorded on the National Personal Insolvency Index, affects credit for years, can limit some work, and restricts overseas travel without the trustee's permission. Some debts (most fines, child support) aren't cleared.
Bankruptcy isn't the only option — a Part IX Debt Agreement may suit you better. Get advice before you act. My Lawyer Melbourne advises on bankruptcy and debt solutions.
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Book a consultMore on Bankruptcy & insolvency →General information only, specific to Victoria and current as at 2026 — not legal advice. Please contact us for advice about your particular situation.