Bankruptcy is a process designed to provide a fair and equitable outcome for all involved if an individual is unable to pay their debts. It gives the debtor instant financial relief and ensures that if there are any funds that can be put towards the debts, they are realised effectively and distributed evenly.
Bankruptcy also presents a number of disadvantages to an individual, so it is important that one is fully aware of all implications before making any final decisions. This includes placing a record on your credit file, impairing your ability to source finance in the future, restrictions on overseas travel and a permanent listing on the National Personal Insolvency Index. Some careers may be affected by bankruptcy, and if you have any substantial assets such as a home, you may need to surrender them to your bankruptcy Trustee to repay your outstanding debts.