Who can be made bankrupt?
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Only people can be made bankrupt, not businesses or companies. Where a partnership or persons trading under a business name are insolvent, it is not the business that is bankrupted but the individual or individuals who run that business. The Bankruptcy Act does not cover companies and instead the winding up of companies is regulated by the Australian Securities and Investments Commission (ASIC) under the Corporations Act.
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A person younger than 18 can be made bankrupt, but not if the debts that trigger the bankruptcy are unenforceable under contract law due to the person’s age (incapacity to contract).
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Debtors who are not Australian citizens or residents can become bankrupt if they live in Australia or have a business connection with Australia. (For more details on what kind of business connection is required, see Bankruptcy Act ss 7(1), 43.)
Who can be made bankrupt?
Chapter: 5.3: Understanding bankruptcy
Contributor: Paul Latimer, Adjunct Professor, Swinburne Law School; Volunteer lawyer, Fitzroy Legal Service
Current as of: 1 September 2024
Law Handbook Page: 320
Next Section: Who administers the bankruptcy law?
