If you are unable to pay your debts and are not able to come to suitable arrangements with your creditors you can voluntarily become bankrupt or a creditor may take action and by order of the court, declare you bankrupt. This process provides protection to people who are unable to repay their debts and cannot reach an agreement with their creditors. Bankruptcy generally lasts for a period of 3 years but can be extended, depending on the circumstances. A bankruptcy will appear on your credit records for a period of 7 years and will be obtained by looking at your credit file by any creditor you request finance from.

Under the bankruptcy act you are not able to obtain any finance while under bankruptcy. You are not permitted to be a director of a company. You can be self employed and run a business under bankruptcy so long as you meet the required guidelines. It’s best to discuss the specifics of a bankruptcy before entering unto one to ensure it meets your intended outcomes.