Important to note
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.