Revised 1 November, 2024. Article originally published 3 March, 2018.
The answer depends on the type of visa a bankrupt applies for.
Australia’s visa regime is complex, with a wide range of visa options. As a result, the impact of bankruptcy varies based on the type of visa that is being sought.
Here are the key ways that bankruptcy can impact a visa application:
Financial requirements: Certain visas, such as business or investor visas, require applicants to demonstrate a minimum level of assets or investment capital. Bankruptcy can make it difficult to meet these financial criteria.
Character assessment: While bankruptcy itself is not a criminal offense, if the bankruptcy was associated with fraudulent activities or financial misconduct, it could negatively affect the mandatory character test required for all visa applicants.
Employment prospects: For skilled visas, proving employability is crucial. Bankruptcy can affect your ability to obtain certain professional licenses or registrations in Australia, which will limit your ability to meet employment criteria.
Debt to the Australian Government: If you have previously lived in Australia and owe money to the government (e.g., unpaid taxes or fines), these generally must be paid, or arrangements made for payment, as a prerequisite to the granting of a visa. While Bankruptcy can resolve some debts, it does not result in payment, and does not resolve certain types of government fines. As a result, bankruptcy can make it more difficult to obtain a visa, where the Australian government is a creditor in the bankruptcy and you remain an undischarged bankrupt.
Bankruptcy is especially a factor when applying for a business visa. In these cases, the Department of Home Affairs also looks at an applicant’s previous business experience in Australia, and will not consider this criterion satisfied if:
The applicant has been declared bankrupt in the last five years (which is permanently recorded on the National Personal Insolvency Index (NPII)).
The applicant has previously or currently is actively involved in a business or held a leadership/management position in a business that has experienced or is experiencing insolvency.
The business has suffered recent trading losses and the business is considered unlikely to be successful in the long term because of the applicant involvement or decision-making in the business.
The above is qualified by decision makers taking the following into account:
The applicant’s business history following bankruptcy.
Their level of decision-making in any insolvent entities.
Whether they have entered into numerous bankruptcies or been involved with multiple insolvent entities.
If there were any external, mitigating factors affecting liquidity that were outside the applicant’s control.
Bankruptcy does not limit someone from becoming a sponsor for a spousal or partner visa.
If you are contemplating bankruptcy while you are on a visa, in the process of applying for, or considering applying for an Australian visa, you should seek professional advice before declaring yourself bankrupt.