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How long does bankruptcy last in Australia?

FAQs | How Does Bankruptcy Finish

Bankruptcy in Australia normally lasts for 3 years and 1 day.

Bankruptcy can be extended for it to last up to 8 years. This only happens when the bankrupt person does not follow the rules and fails to abide by the Bankruptcy Act 1966. If the person has a change of heart and works with the trustee to correct the problem, it is normal for the trustee to then have the objection to discharge removed.

If you would like Nicholls & Co to administer your bankruptcy, we ask you to work with us for the orderly resolution of your bankruptcy. It is not pleasant for us to be placed in the position of having to object to a person’s discharge from bankruptcy.

It is possible to end your bankruptcy early if you are able to reach an agreement with the creditors and trustee, this is known as a Part IV Agreement. A Part IV Agreement can be relevant if you have a SMSF with assets that are not readily realisable. If a creditors meeting approves your Part IV proposal, your bankruptcy is then annulled.

Sometimes, a person will inherit or win sufficient money to clear their debts early and in these cases, the creditors and costs of the bankruptcy will be paid, the bankruptcy then automatically annulled and any surplus funds returned to you.

For further information on bankruptcy, we recommend our articles ‘Pathways to Bankruptcy – Essential Facts’, ‘Life During Bankruptcy’ and ‘The Bankruptcy Option Explained’.

Nicholls & Co have a complementary ‘help desk’ to answer your questions on bankruptcy. Call Nicholls & Co on 1300 060 122 or email

Alan Nicholls - Registered Trustee

Alan Nicholls’ no obligation help desk

Nicholls & Co provide a free, no obligation ‘help desk’ for people considering bankruptcy – we discuss and explain bankruptcy and answer questions for anyone who is considering bankruptcy. The Nicholls & Co help desk can be accessed by phone  
1300 060 122  or . Alan Nicholls, Registered Trustee in Bankruptcy is also available to answer your questions to enable you to decide if bankruptcy is right for you.