Bankruptcy/Debt Agreements and your credit report

Consumers who are facing a bankruptcy or debt agreement may be uncertain about the consequences of the bankruptcy or debt agreement.

It is important for consumers to understand that:

• Information about a consumer’s bankruptcy or debt agreement will be included on their credit report. The CreditSmart bankruptcy factsheet explains the different types of information and importantly how long they will appear on a credit report 
• Proposed changes to the bankruptcy law to shorten the bankruptcy period will not impact the time period that information appears on a credit report. Information about a consumer’s bankruptcy or debt agreement will also continue to be available from the National Personal Insolvency Index (NPII). There is currently no time limit for information on the NPII.
• When applying for credit, a credit provider may ask a consumer if they have ever been bankrupt or subject to a debt agreement.
• A consumer who has been bankrupt or subject to a debt agreement should answer ‘yes’, even if the bankruptcy has been discharged or debt agreement has been terminated.
• This can make it more difficult for consumers to recover; however potential lenders will still take into account the time since the bankruptcy/ debt agreement and the most recent credit behaviour for the individual.