What are bankruptcies?
When you declare bankruptcy, you are making a legal statement that you are unable to repay your debts.
A bankruptcy may be listed on your credit file for whichever of the following periods ends later:
- The period of 5 years that starts on the day on which you become bankrupt;
- The period of 2 years that starts on the day the bankruptcy ends.
This generally means that a bankruptcy can stay on your file for up to 7 years.
Having a bankruptcy listed on your credit file can severely impact your ability to access credit in the future. Try to discharge, close or complete the Bankruptcy Act action as soon as possible. This will reduce the amount of time that your credit profile will be affected.
Before you consider declaring bankruptcy, make sure you fully understand the consequences and consider discussing your circumstances with a financial counsellor or visit a community legal centre or legal aid office. For more information about these services, check out Credit Savvy’s Key Resources here.