Bankruptcy is a legal financial status that can have positive and negative effects. It is strongly recommended that a debtor who is considering bankruptcy seek advice from an independent and qualified source. Bankruptcy can affect a person’s ability to get credit and employment opportunities.

Contributors

Paul Latimer

Adjunct Professor, Swinburne Law School

Who can be made bankrupt?

Last updated

1 June 2021

Can companies or businesses be bankrupted?

Only people can be made bankrupt, not businesses or companies. Where a partnership or persons trading under a business name are insolvent, it is not the business that is bankrupted but the individual or individuals who run that business. The Bankruptcy Act (s 7) does not cover companies.

Can minors be bankrupted?

A person younger than 18 can be made bankrupt (s 7(1A)), but not if the debts that trigger the bankruptcy are unenforceable under contract law due to the person’s age.

Can citizens of other countries be bankrupted?

Debtors who do not have Australian citizenship or residency can become bankrupt if they live in Australia or have a business connection with Australia (for more details on what kind of business connection is required, see ss 7(1), 43).

Back to
Managing your money