Personal Bankruptcy

When personal debts and business liabilities start to overlap, the way forward becomes murky. At HM Advisory, our team of Registered Trustees and Insolvency Experts set out the Bankruptcy services available to you, explain what each involves, and help protect your interests along the way.

What is Bankruptcy?

Bankruptcy is a legal process designed to relieve individuals from unmanageable debts under the supervision of a Registered Trustee. It can be:

Voluntary, where you apply for Bankruptcy yourself
Involuntary, where a Creditor initiates the process

Once Bankruptcy is in effect, the Trustee takes control of your divisible assets, manages Creditor claims, and ensures debts are addressed according to law. Personal Bankruptcy can be a fresh start, shielding you from further legal stress while helping you rebuild at a manageable pace.

Bankruptcy Advice for Your Circumstances

A person carrying one large personal debt is in a different position to a former Director holding business guarantees, and Bankruptcy advice differs accordingly. The starting point in either case is an accurate picture of the debts, the assets, and the obligations attached to them.

Overwhelming Personal Debt

If you’re struggling with credit cards, personal loans, or unpaid bills, we can help assess your options and create a clear plan to manage or resolve your debts.

Creditor Pressure and Legal Action

When you’re facing enforcement actions, garnishee orders, or constant Creditor contact, we step in to halt action and provide immediate relief.

Complex Financial Circumstances

For those with multiple debts, jointly held obligations, or complicated personal assets, our Bankruptcy Trustees evaluate your situation thoroughly and guide you through the process.

Director or Guarantor Risks

If you hold personal guarantees on business debts or face potential liability, we provide advice to mitigate risks and navigate obligations safely.

Insolvent Deceased Estates

We assist executors or beneficiaries when a deceased estate cannot meet its obligations, helping protect rights and ensure Creditors are appropriately managed.

Learn more about how we handle Deceased Estates and other Personal Insolvency matters.

Our Bankruptcy Services

Our Registered Trustees can assist with a range of Bankruptcy matters, including:

Assessing your financial circumstances and available options
Providing Bankruptcy advice before you make a decision
Acting as a Bankruptcy trustee where appointed
Explaining your rights and obligations
Managing Creditor claims and enquiries
Dealing with divisible assets
Providing guidance throughout the Bankruptcy process
Advising on Bankruptcy annulment and Section 73 compositions
Considering alternatives to Bankruptcy where appropriate

What’s the Difference Between Bankruptcy, Insolvency, and Liquidation?

Insolvency occurs when a person or business cannot meet its financial obligations as they fall due.

Bankruptcy is a formal legal process relieving individuals of debts under the supervision of a Trustee, providing structured financial relief.

Liquidation is the orderly winding-up of a company's affairs, selling assets to satisfy Creditors, and often ending the business's operations.

Depending on your financial situation, our team can help you consider solutions beyond Bankruptcy to resolve your debts.

	Bankruptcy	Insolvency	Liquidation
Applies to	Individuals	Individuals or businesses	Companies
What it means	A formal legal process for an individual	Being unable to meet financial obligations as they fall due	The orderly winding-up of a company's affairs
Administered by	Bankruptcy trustee	Depends on the circumstances	Liquidator
Purpose	Provide a formal process for dealing with an individual's debts	Address financial distress	Realise company assets and deal with creditor claims

How Does Bankruptcy Start?

Voluntary Bankruptcy

For Voluntary Bankruptcy, you lodge a Declaration of Intention and then apply for Bankruptcy under a debtor's petition.

Creditor-Led Bankruptcy

For Creditor-led proceedings, a court may issue a Sequestration Order if conditions are met.

Our team ensures your obligations are met, minimising stress and legal risk. We'll talk you through your options and pathways to financial freedom.

What Does a Bankruptcy Trustee Do?

The trustee administers the bankrupt estate under the Bankruptcy Act and its regulations. Depending on the circumstances, this may involve:

Identifying and dealing with divisible assets
Reviewing the bankrupt person's financial affairs
Managing creditor claims
Communicating with Creditors
Ensuring relevant obligations are met
Distributing available funds in accordance with the law

Depending on how the Bankruptcy came about, an official trustee in Bankruptcy may also administer an estate. This is where the Australian Financial Security Authority's Official Trustee is appointed instead of a registered one.

Why HM Advisory?

Our approach brings together technical expertise with real guidance. We are with you every step of the way during this chapter:

Proven expertise: Registered Trustees with decades of experience navigating Bankruptcy.
Empathetic guidance: We simplify complex legal steps, easing stress and confusion.
Tailored solutions: Advice specific to your financial situation, whether personal debt, Director obligations or Insolvent Estates.
Practical outcomes: Protect your rights, satisfy Creditor requirements, and explore options to rebuild financial stability.

We're a boutique practice, but we're built to take on complex appointments. Where there's a realistic chance to return a business to profitability, our leadership team will look for it.

With offices in Melbourne, Perth, Brisbane, and Sydney, we’re here to provide confidential, professional advice for anyone facing financial distress, helping you move forward with clarity and confidence.

FAQs

How long is Bankruptcy in Australia?

Bankruptcy usually lasts three years and one day from when your Statement of Affairs is accepted by your Bankruptcy trustee. Depending on your situation, it may be extended if you don't meet certain obligations.

Many people seek Bankruptcy advice to understand whether early annulment or a Section 73 composition could shorten the period. If during the Bankruptcy process you seek to have your Bankruptcy annulled through a Section 73 composition, our expert team can guide you through the steps required and bring your proposal to Creditors.

Throughout the process, your Trustee manages your financial affairs under the Bankruptcy Act, providing structured support when you need it most.

How long does Bankruptcy stay on my file?

Your Bankruptcy is recorded on the National Personal Insolvency Index (NPII) and noted on your credit file. The credit reporting impact generally lasts five years, while the NPII record remains permanently for transparency. With the right Bankruptcy services and guidance, you can start rebuilding much sooner than most people expect, even while the listing remains.

How do I Enter Bankruptcy?

You can enter Bankruptcy either voluntarily or through Creditor action.

Voluntary Bankruptcy involves lodging a Debtor’s Petition with AFSA, giving you more control over the timing and process.
Involuntary Bankruptcy occurs when a Creditor applies to the court for a sequestration order.

In both cases, a Registered Bankruptcy Trustee is appointed to manage your estate. Seeking professional Bankruptcy advice early helps ensure you understand your rights, obligations, and all available alternatives before taking this step.

What if I Don't Have Any Assets?

Bankruptcy may still offer meaningful relief, even if you have little or no assets. A Bankruptcy Trustee will review your situation and may not need to sell any assets if none exist. Bankruptcy services can help stop Creditor action, pause legal enforcement, and give you space to stabilise your finances. Many people with no assets find Bankruptcy a practical way to reset and rebuild without ongoing pressure.

What is a Bankruptcy Trustee?

A Bankruptcy Trustee is a registered professional responsible for administering the entire process. They manage your estate, communicate with Creditors, realise assets if required, and ensure the process is fair and compliant with the law. Your Trustee acts independently while also helping you understand each step, making them an essential part of effective Bankruptcy Services and Sound Bankruptcy Advice.

Can Bankruptcy be Annulled?

Yes, most commonly where the debts and costs are paid in full, or where creditors accept a proposal such as a Section 73 composition. Which of those is realistic depends entirely on your position.