How you become bankrupt
There are 2 main ways you can become bankrupt – you can apply for bankruptcy for yourself (debtor’s application), or the court may make you bankrupt (creditor’s application).
Bankruptcy is a last resort if you are facing large debt. It will clear your unsecured debt, but it will also significantly impact your life and limit your access to some services.
Applying for bankruptcy (debtor’s application)
If you owe more than $1,000, you can apply for bankruptcy. This is called a debtor’s application.
Made bankrupt by the court (creditor’s application)
If you owe someone $1,000 or more, they can apply to the court to make you bankrupt. This is called a creditor’s application.