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In my opinion there is a huge amount of misinformation out there about bankruptcy.

Some of it I’d call ‘Urban Myths’  and when you look into it a bit more closely you realize it just isn’t true at all.

For example, a friend or relative might tell you not to go bankrupt because you would lose your passport, and so would not be permitted to travel overseas.

This would be extremely unlikely, but because you hear it from a trusted source then most likely you will believe it to be true.

I think a lot of the misinformation about bankruptcy is put out by those who have a business interest in keeping you in debt, for example the debt collection and debt management industries.

The last thing they want to hear about is you filing for bankruptcy as this ends their conversation with you, permanently.

The core truth about bankruptcy is that, from your perspective, your problem debts will be cancelled immediately.

  • The debt collectors phone calls stop and they are never coming back
  • Major assets like houses, boats and caravans,  are affected by you being bankrupt, but quite often this situation can be managed by your bankruptcy trustee, where another person can agree to buy the bankrupt estate’s interest in the asset
  • Best of all you can simply get on with life

The most common myths that debt collectors or Debt Agreement salesman tend to talk to about are.

  • that your problem debts will become payable again once your bankruptcy is completed, this is complete garbage and certainly didn’t happen to me
  • Or you won’t be able to travel overseas when you are bankrupt, the correct procedure is for you to simply fill in a form so the journey can be approved by your trustee
  • Or you will lose your car, this is extremely unlikely
  • Or perhaps you have heard that your credit rating is worse if you are bankrupt as compared to being in a Debt Agreement, that’s nonsense, it is the same outcome either way
  • I’ve heard some people say that they have been told not to go bankrupt as it would be announced in the Newspaper, that probably hasn’t happened for 20 years, and again it certainly didn’t happen to me
  • Or that you would lose your furniture and that a trustee or someone will come to your house to see what you’ve got, again, this is complete nonsense and didn’t happen to me

There are dozens of other ‘Bankruptcy Myths’ out there.

These are just a few of the more common ones that I hear most often.

If someone is talking to you about bankruptcy and you think what they are saying might be a ‘Bankruptcy Myth’ then please give us a call on 1300 794 492 or send an email to

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