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Bankruptcy

Bankruptcy is a legal process applied when a person cannot repay their debts, resulting in restricted borrowing, asset management controls, and credit file impacts lasting several years.
Bankruptcy significantly limits approval chances for Vehicle Finance, Equipment Finance, Business Loans, and Low Doc Applications.
Related terms: Default, Arrears, Repayment History.
Relevant blogs: Bad Credit Business Loans 2025, Rebuilder Credit Roadmap 2025, Red Flags a Business Loan Is Bad.

Why Bankruptcy Matters

Bankruptcy is one of the most severe indicators of financial distress.
Even after discharge, lenders often require strong recent trading history, clean bank statements, and evidence of financial recovery for applicants across the Tradie Hub, Truckie Hub, Café Hub, and Whitecoat Hub.

What Bankruptcy Shows

Severe financial distress or inability to repay debts.
Limited borrowing capacity for several years.
Higher risk for Business Lines of Credit.
Restricted eligibility for Working Capital Loans and Invoice Finance.
A need for post-bankruptcy rebuilding before applying for new credit.

Official info: asic.gov.au

How long does bankruptcy stay on my credit file?

Bankruptcy typically remains on your credit file for 5 years or longer depending on the reporting body.

Can I get finance after bankruptcy?

Yes — but lenders usually require evidence of stable income, clean bank statements, and strong post-discharge behaviour.

Does bankruptcy remove all debts?

No — some debts like fines, child support, and certain tax obligations still remain payable.

Is bankruptcy the same as a default?

No — a default is a missed repayment, while bankruptcy is a legal process involving multiple debts.

Can bankruptcy be removed early?

Yes — only through annulment, which requires full repayment of debts or proven invalidity.