Strategic personal insolvency advice when company debt becomes personal debt.
If you’re a director facing locked-in DPN exposure, called-up personal guarantees, or an ATO bankruptcy petition, you need advice from someone who understands both the company and the personal picture — and how they interact.
What it is
Personal insolvency, advised in the context of your business.
Personal insolvency for company directors is rarely a standalone problem. It’s usually the consequence of a company that has failed or been wound up, and director liabilities — DPNs, personal guarantees, overdrawn loan accounts — that have crystallised personally.
We advise on the full range of personal insolvency options under the Bankruptcy Act 1966: bankruptcy, Part X Personal Insolvency Agreements, Part 9 Debt Agreements, and informal arrangements with creditors. Critically, we look at the personal picture in the context of the company picture, not in isolation.
Who it’s for
Is this the right pathway for you?
- Directors facing locked-in DPN liabilities they cannot pay
- Directors with personal guarantees being called up by suppliers, landlords, or banks
- Directors who have been served with a bankruptcy notice or creditor’s petition
- Directors looking for a structured alternative to bankruptcy that protects key assets
- Directors who want to understand the consequences of bankruptcy before making any decision
Key facts
At a glance.
Bankruptcy is a last resort
Most directors have alternatives. We assess every one before any insolvency option is recommended.
Threshold matters
Part 9 has strict income, asset and debt thresholds. Part X has none, making it suitable for higher exposures.
Discharge timeframes
Standard bankruptcy is now generally three years. Part 9 agreements typically run 3–5 years.
Some assets are protected
Tools of trade, certain superannuation, and limited household goods may be protected — but the rules are strict.
How it works
The process, step by step.
STEP 01
Confidential personal assessment
A discreet review of your personal financial position, assets, liabilities, and the source of each exposure.
STEP 02
Compare every option
Bankruptcy vs Part X vs Part 9 vs informal arrangement — we walk through the trade-offs of each.
STEP 03
Coordinate with company strategy
Where the company is also distressed, we make sure both strategies work together rather than against each other.
STEP 04
Implement and protect
Once a path is chosen, we manage the process and stay with you through to discharge.
Important. Personal insolvency has long-term consequences for credit, future directorships, and travel. It’s the right answer for some directors and the wrong answer for others. We will never recommend it unless we’ve worked through every viable alternative first.
Common questions
What people ask most often.
How long does bankruptcy last?
In Australia, bankruptcy typically lasts three years and one day from the date the statement of affairs is accepted by AFSA. During that period there are restrictions on credit, overseas travel, and acting as a director. After discharge, the bankruptcy remains on the National Personal Insolvency Index permanently.
Will I lose my house?
It depends. The trustee in bankruptcy takes control of your divisible property. The family home may be sold to realise equity for creditors, although equity-share arrangements with family members and other strategies can sometimes be negotiated. This is one of the most important things to explore before bankruptcy is entered into, not after.
Can I avoid bankruptcy if the ATO has issued a bankruptcy notice?
Often, yes. A bankruptcy notice is a precursor to a creditor’s petition — but there are several pathways to avoid the petition being filed or granted, including Part X arrangements, settlement negotiations, and (where eligible) Part 9 Debt Agreements. Time is critical.
Will my spouse be affected?
Generally, your spouse is not personally liable for your debts unless they have signed personal guarantees themselves. However, jointly held assets and the family home are often affected. We routinely advise directors with spouses on how to manage this.
Can I still run a business after bankruptcy?
You can be self-employed, but you cannot act as a company director without leave of the court while you remain undischarged. After discharge, you can return to directorship in most cases. We can advise on the practicalities.