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Does bankruptcy actually clear your debts?

Some debts aren't included in bankruptcy – here is what you need to know.

Updated

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While bankruptcy is often viewed as a "clean slate", a common misconception is that it clears all of your debts. Declaring bankruptcy does mean that the large majority of your debts will be cleared so you won't have to pay them after your bankruptcy ends, but there are a few debts that are not included in this.

This guide will take you through what debts are and aren't included in your bankruptcy so you can make an informed choice about whether it's right for you.

Unsecured loan debt

DebtWill my debt be cleared by bankruptcy?Conditions
Credit cardYes-
Store cardYes-
Unsecured personal loanYes-
Unsecured business loanYes-
Trade creditorYes-
Payday loanYes-
Pawn shop loanYes

You won't get your pawned item/s back.

Overdrawn accountYes-

Secured loan debt

DebtWill my debt be cleared by bankruptcy?Conditions
House mortgageYesYour house is likely to be sold though.
Motor vehicle securityYesYou will have to surrender your vehicle if the account falls into arrears or if the vehicle equity is worth more than the indexed amount.
Secured business loansYesNoYou need to repay the debt or the secured asset may be sold.
Chattel mortgageYesNoYou need to repay the debt or the secured asset may be sold.

Household debt

DebtWill my debt be cleared by bankruptcy?Conditions
Gas, electricity, phone, Internet, pay TVYes

The supplier may choose to no longer supply you or may require a bond.

Outstanding rent where you liveYes

Check local laws to see your tenancy rights – your landlord may be able to terminate your tenancy agreement.

Outstanding rent at a place where you used to liveYes-
Debts from a property you damaged as a tenantYes-

Centrelink, tax, fines, fees and court debts

DebtWill my debt be cleared by bankruptcy?Conditions
Legal feesYes-
Medical feesYes-
Accounting feesYes-
State finesNo-
Non-court state finesNo-
Court-ordered restitution amountsYesOnly if the amount was fixed before your bankruptcy.
TaxationYes

Your wage deductions may continue.

Child supportNo-
CentrelinkYes

Doesn't apply if your Centrelink was incurred by fraud.

HECS/HELP/SFSS debtNo-

Other debts

DebtWill my debt be cleared by bankruptcy?Conditions
Victims of crimeYesNoIt depends on your state's laws and when or if the debt was registered.
Liquidated debts/liquidated damagesYes-
Unliquidated debts/unliquidated damagesNo

This is unless the debt is incurred by reason of a contract, promise or breach of trust.

Debts incurred after you enter bankruptcyNo-
Provable debts incurred by fraudNo-

Want to speak to someone about your debt?

Rates last updated October 29th, 2020
Name
Fox Symes Debt Solutions Fox Symes Debt Solutions Fox Symes offers a range of debt consolidation options to help you if you're struggling with multiple debts. Enquire now

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Personal Loan Offers

Important Information*
Logo for Harmoney Unsecured Personal Loan
Harmoney Unsecured Personal Loan

You'll receive a fixed rate between 6.99% p.a. and 25.69% p.a. based on your risk profile.
Apply for a loan up to $50,000 and repay your loan over 3 or 5 years terms.

Logo for NAB Personal Loan Unsecured Fixed
NAB Personal Loan Unsecured Fixed

You'll receive a fixed rate between 9.99% p.a. and 18.99% p.a. ( 10.88% p.a. to 19.83% p.a. comparison rate) based on your risk profile
An unsecured loan up to $55,000 you can use for a range of purposes and pay off over up to 7 years. Note: Majority of customers will get the headline rate of 12.69% p.a. (13.56% p.a. comparison rate) or less. See Comparison rate warning in (i) above.

Logo for SocietyOne Unsecured Personal Loan
SocietyOne Unsecured Personal Loan

You'll receive a fixed rate between 6.99% p.a. and 20.49% p.a. based on your risk profile
A loan from $5,000 to use for a range of purposes. Benefit from no ongoing fees and no early repayment fee.

Logo for Pepper Money Unsecured Fixed Rate Personal Loan
Pepper Money Unsecured Fixed Rate Personal Loan

You'll receive a fixed rate between 6.95% p.a. and 17.95% p.a. based on your risk profile
A loan from $5,000 to use for a range of purposes. Make additional repayments or pay off the loan early, penalty-free.

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