What happens when your bankruptcy ends

Generally, bankruptcy goes for three years.  Once this three-year period is over you are discharged from bankruptcy, meaning the period of your bankruptcy ends.  So, what happens when your bankruptcy ends?

What happens to your bankrupt estate?

When you go bankrupt a bankruptcy Trustee is appointed to administer certain of your affairs.  This is called the administration of your bankrupt estate.  The Trustee may continue administering your bankrupt estate even after your bankruptcy has ended to do things like sell assets which have not been sold, or distribute money held to creditors or other parties.

What happens to people you owe money to?

From the day you go bankrupt you do not have to pay most debts which you owe.  And when your bankruptcy ends you are released from these debts.  There are some exceptions however including:

  • Secured creditors – if a secured creditor holds security over an asset you still own they retain their rights in respect of this asset. For example someone who holds a mortgage over a house will still have rights under the mortgage.
  • HECS and Help debts – you are not released from HECS, HELP or similar type debts and you have to pay them.
  • Penalties and fines imposed by a Court – if a Court has made an order for a fine or a penalty you will not be released from this debt.
  • Centrelink and Child Support debts.

So, in summary there are a small number of categories of debts you will still have to pay.  And this is one of the reasons you should get advice from a professional before going bankrupt.

What happens to assets which you own?

If you own an asset which your bankruptcy Trustee was entitled to sell they can still sell if for a period of up to 20 years after your bankruptcy ends.  The most common type of asset we see this applying to is a house.  This is because there may be no equity in a house property when someone goes bankrupt, but equity can accrue over time and the equity can then be realised by a bankruptcy Trustee.

What happens to your credit rating?

Bankruptcy will still appear on your credit rating for at least another two years after your bankruptcy finishes.  However, there is a register of people who have been bankrupt which is maintained by the Federal Government and so the information on your bankruptcy will be indefinitely available.

Is anything else relevant?

There are various other relevant matters which include:

  • You can be a company director again as soon as your bankruptcy ends.
  • Once your bankruptcy ends there is no restriction on overseas travel.
  • If you still owe income contributions to your bankruptcy Trustee once your bankruptcy ends you still have to pay them.
  • Once your bankruptcy ends you still must cooperate and assist your bankruptcy Trustee if required.

Contact us for advice and assistance

 If you are considering bankruptcy it is best to get advice about what its effects may be, so please contact Pearce & Heers at our Brisbane or Gold Coast offices for an initial obligation-free 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