Bankruptcy stays on a credit file for how long?
In Australia, bankruptcy remains on your credit report for 5 years from the date you became bankrupt or 2 years from when your bankruptcy ends, whichever is later. This means the listing can remain for longer than 5 years if your bankruptcy is extended. Source: AFSA.
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So which is it – 5 or 7?
If you want to get technical, it’s 2 years after you’re released from bankruptcy or 5 years (whichever is longer).
Given that bankruptcy generally lasts for 3 years and 1 day before you’re automatically released, the listing usually stays on a credit file for around 5 years.
A scenario where it’ll be there for more than 5 years is when a bankruptcy administration is extended beyond the default 3 year period.
Where is the confusion coming from?
That’s easy enough to explain.
Prior to 2014, all personal insolvency events like Debt Agreements, Personal Insolvency Agreements and Bankruptcy were listed on credit files for 7 years.
What happened in 2014?
On 12 March 2014, changes to the Privacy Act 1988 (Cth) (Act) came into effect.
The reform bill amended a number of sections within the Act and one of them was the retention period for personal insolvency events remaining on a credit file.
Prior to 2014, the retention period for personal insolvency information held on credit files was 7 years. The 2014 amendments then transformed the retention period to 5 years.
But I’ve read that bankruptcy stays on a credit file for 7 years on other websites?
We believe you because we have too.
There may be websites out there stating that bankruptcy stays on a credit file for 7 years.
In all probability, that content was published before March 2014 and hasn’t been updated since.
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