What Happens To My Credit Rating If I Go Bankrupt?

You may have stretched your finances a little too far during the coronavirus pandemic. If so, are you considering whether to go bankrupt? If you are considering bankruptcy or want to understand the effects of bankruptcy we have information here that can help. Alternatively, if you want to speak to someone about your circumstances, give us a call at 07 3221 0055.

How Does Bankruptcy Affect Your Credit Rating?

If you have been declared a bankrupt, your bankruptcy will be recorded by credit reporting agencies (e.g. Equifax and Experian). This will include things like, the date you went bankrupt and when you are eligible to be discharged.

The recorded information will be kept by the credit reporting agencies for the longer of:

  • Five years from the date you became bankrupt; or
  • Two years from when your bankruptcy ends.

As such, bankruptcy can and will have a negative effect on your credit rating. The impact it has on your ability to borrow money however, varies, as its importance differs between lenders. People often worry they won’t be able to get a loan to buy a house if they have been bankrupt. However, if you can save enough of a deposit and satisfy other lending criteria you will be able to get a loan.

Where Else Will Your Bankruptcy be Recorded?

Your bankruptcy is permanently listed on the National Personal Insolvency Index (NPII). The NPII is a public register than can be searched by lenders for a fee.

Below are some of the information that will also appear on the NPII:

  • The start and end dates of your bankruptcy;
  • Your name, date of birth and address (as known at the time you when bankrupt);
  • Any previous names and aliases; and
  • The name and contact details of the trustee of your bankruptcy.

Will Your Employer Find Out? 

There is no obligation for your bankruptcy Trustee to tell your employer you are bankrupt. You also have no obligation to do so unless it is a term of your employment contract, which is rare.

Can You Avoid Bankruptcy?

If you are facing financial difficulties, there are options that we may help you explore. We have summarised the options here and here. Paying off your debt will obviously avoid the prospect of you becoming a bankrupt. We can assist in negotiating a settlement with your creditors, often for much lower than the debt you owe.

We have also previously written about how we have helped our clients avoid bankruptcy. Below are some other examples of our success stories:

  • Settling a mortgage shortfall of $365,000 for $90,000 in $2,500 monthly instalments.
  • Settling a personal guarantee debt of $40,000 for $15,000.
  • Settling a lease shortfall debt of several hundred thousand dollars, which the directors had guaranteed, for less than $80,000.

Avoiding bankruptcy by negotiating settlements naturally avoids the problems commonly associated with being recorded by credit reporting agencies and listed on the NPII register.

Contact Us For Assistance

If you are in financial difficulty and would like to explore all options that may be available to you, please call us on 07 3221 0055 or contact us for a free, no-obligation consultation.


We’re happy to answer any questions you may have, so please don’t hesitate to call us and schedule a consultation.



Level 12
127 Creek Street
Brisbane Qld 4000


Phone: 07 3221 0055
Fax: 07 3221 8885

Postal Address

GPO Box 691
Brisbane Qld 4001




Level 15, Corporate Centre One
2 Corporate Court
Bundall Qld 4217


Phone: 07 5630 1179
Fax: 07 3221 8885