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Legal guide · Victoria

What happens when you go bankrupt in Australia?

Bankruptcy can give a fresh start from unmanageable debt — but it has real consequences, and there are alternatives worth considering first. We’ll explain your options.

Debt & disputes

Bankruptcy is a formal process that can release you from most debts you can’t pay — a fresh start — but it has real consequences and usually lasts three years.

What it means

A trustee manages your affairs; some assets may be sold; there are limits on credit, travel and certain roles. Some debts (like most fines and child support) aren’t cleared.

What you keep

Ordinary household goods, tools of trade up to a limit, and some superannuation are generally protected. The details matter, so get advice.

Alternatives first

A debt agreement, a personal insolvency agreement, or negotiating with creditors may be better than bankruptcy — depending on your situation.

How we help

We explain bankruptcy and the alternatives plainly, and help you choose the right path. Book a consult before you decide.

Common questions

Good to know

How long does bankruptcy last?

Usually three years, though some restrictions and records last longer. Get advice on how it would affect you.

Are there alternatives to bankruptcy?

Often yes — a debt agreement, personal insolvency agreement, or negotiating with creditors may suit you better.

General information only — for advice about your situation, see more guides or book a consult with ORLA Legal.

Struggling with debt? Understand your options.

Speak with an experienced Victorian lawyer — book online, or call us 24/7.

The ORLA group · one team

Buying, selling or refinancing? We handle the whole move.

ORLA Legal works hand-in-glove with our sister services, so your loan, your conveyancing and your property search are coordinated by one team — all the way to settlement.