What to do when a customer is bankrupt 107-05070010

For Debt Staff only.

This document outlines the impact on Centrelink debts when a customer is declared bankrupt.

Customer contact

The work undertaken in the Bankruptcy Team is specialised. If a customer's enquiry cannot be resolved at the first point of contact, advise them someone from the Bankruptcy Team will contact them. See the Process page.

Escalation required

Bankruptcy Processing Officers should discuss a case with the Bankruptcy APS5 officer if:

the case is unusual and not covered in the relevant Operational Blueprint
referral to relevant Helpdesk, policy team and/or Legal Services is required

Debt incurred during bankruptcy

The period when a debt is incurred determines whether a debt, or part of a debt, is written off as a result of a customer's bankruptcy.

Debts incurred due to fraud

A debt incurred due to fraud is recoverable and not released via bankruptcy. These debt(s):

must be repaid in full after discharge from the bankruptcy period
must be rolled over into a subsequent bankruptcy/s, whether concurrent, consecutive or otherwise
can be pursued by the creditor (Services Australia) by the usual methods of recovery, once the bankruptcy period is discharged

Reparation and judgement orders

Treatment of a debt changes depending on the dates the bankruptcy and reparation and/or judgement order occurred.

The Resources page contains links to the Australian Financial Security Authority (AFSA) website, EQUIFAX and contact details.