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.
