Bankruptcy Beyond the Three-Year Period

Bankruptcy Beyond the Three-Year Period

A common mistake many individuals make upon bankruptcy is that the process itself will only last three (3) years. This article will explain some of the Trustee in Bankruptcy’s powers during and beyond one’s bankruptcy and how the term of an individual’s personal insolvency can vary.

When does the three-year period begin and end?

If you were declared bankrupt voluntarily, your bankruptcy will begin on the day the Official Receiver (Australian Financial Security Authority (AFSA)) accepts your Bankruptcy Form. On the contrary, if you were declared bankrupt upon the petition of a creditor (ie. involuntarily), your three-year bankruptcy period will only begin on the day in which you submit your Bankruptcy Form provided it is subsequently accepted by the Official Receiver.  If the Bankruptcy Form is never lodged, the person will remain bankrupt indefinitely.

The bankruptcy period will normally end after three years and one day. For example, if an individual was declared bankrupt on 1 January 2021 and submitted their Bankruptcy Form to AFSA on 18 January 2021 that was accepted, their bankruptcy would end and they will be discharged from bankruptcy effective, 19 January 2024. It should be made clear however, that the Trustee in Bankruptcy has the power to extend an individual’s bankruptcy period by way of an objection to their automatic discharge. There are several reasons in which the Trustee may exercise this power.


Under the provisions of the Bankruptcy Act 1966 (“the Act”), the Trustee has several grounds for objection to consider during the course of an individual’s bankruptcy. The purpose of the objection is to encourage the bankrupt to comply with their obligations. The effect of the Trustee lodging an objection to a Regulated Debtor’s automatic discharge is that their bankruptcy period can be extended to five (5) or eight (8) years depending on the nature of the objection.

Common grounds for objection include but are not limited to:-

  • Failure to pay compulsory contributions;
  • Failure to disclosure particulars of income earned or expected to be earned; and
  • Failure to return passport upon return to Australia.

An extensive list of a Trustee’s grounds of objection can be found under Section 149D of the Act here:


In addition to considering grounds for objection, a Trustee must also consider any offences committed by a Regulated Debtor during the course of their bankruptcy. Should an offence be deemed to have had a material impact on the Regulated Debtor Estate, the Trustee has a positive obligation to report the offence to the Official Receiver who would then determine the necessary course of action. For example, if a Regulated Debtor were to dispose of property sale proceeds prior to bankruptcy and did not properly explain how the funds were disbursed, this would be considered an offence that has had a material impact on the Regulated Debtor Estate as the Trustee is unable to complete their investigations and recover funds for the benefit of creditors.

Common offences include but are not limited to:-

  • Failure to disclose information and/or property;
  • Conceal property or debt, omit, alter or falsify records; and
  • Failure to provide evidence of income.

Should the Official Receiver consider that the Regulated Debtor has committed an offence, the circumstances of the offence will determine whether they are subject to a warning, fine or in more serious cases, imprisonment upon conviction.  

An extensive list of offences and their relevant course of action can be found here:

In the interim, if you have any questions, or your client’s are experiencing financial distress, please contact Brodie Hilet or Neil McLean on (03) 9670 8700.

Brodie Hilet

About the author

Brodie Hilet


Meet our Team of Experts

Brodie joined Rodgers Reidy in 2017, following around 7 years at a boutique insolvency firm. Gaining extensive expertise in in both Personal and Corporate insolvency appointments, restructuring and advisory appointments across a wide range of industries.