Our verdict Possible after discharge
The short answer
Possibly, once you've been discharged. Lenders generally won't lend to someone who is still bankrupt, but a discharged bankrupt can be considered, especially with property security. Bankruptcy stays on your credit report for the later of five years from when it started or two years after it ended, and on the public insolvency index permanently, so a clear account of what happened and what's changed matters.
Key points
- Bankruptcy normally lasts three years and one day; lending usually becomes possible after discharge.
- It stays on a credit report for the later of five years from the start or two years after discharge.
- Your name stays on the National Personal Insolvency Index permanently.
- A property-secured loan with a clear plan is the most common path back to business borrowing.
Is borrowing again after bankruptcy realistic?
For many people, yes — with patience, security and a clear story.
Bankruptcy is a legal process, not a character judgement, and plenty of people who’ve been through it go on to run good businesses. What changes is how lenders look at you for a while, and how much they’ll want to understand.
The key dividing line is discharge. While you’re bankrupt, there are restrictions on obtaining credit and on running a business, and ASIC confirms that an undischarged bankrupt can’t be a company director. Most lenders simply won’t lend until you’re discharged. Afterwards, the conversation opens up.
What timelines apply?
| Record | How long | Source |
|---|---|---|
| Bankruptcy itself | Normally 3 years and 1 day (can be extended) | AFSA |
| Credit report listing | Later of 5 years from when it began, or 2 years after it ended | OAIC |
| National Personal Insolvency Index | Permanent | AFSA |
So even after discharge, a lender will usually see the bankruptcy — on your credit file for a while, and on the NPII forever. That’s why being upfront is non-negotiable. The question isn’t whether they’ll find out; it’s whether they hear it from you first.
Which loans can work after discharge?
Property-secured business loans ($20,000 to $5,000,000) via first mortgages, second mortgages or caveat loans over residential or commercial property are the most realistic path. Because the assessment leans on equity and a repayment plan, past credit issues are weighed case by case rather than ruling you out. Owning property after bankruptcy often means you’ve rebuilt, which itself tells a lender something.
Unsecured, cash-flow and line-of-credit options (typically $5,000 to $500,000) sized on turnover are harder. Some lenders won’t consider a bankruptcy still on the credit file. Others look at how long ago discharge was and how the business trades now. Expect smaller amounts and more questions.
Discharged and ready to build again? Tell us where you’re at — there’s no credit check just to enquire.
What helps a lender say yes?
- Time since discharge. Every clean year helps.
- A clean record since. No new defaults, bills paid on time.
- A clear cause. Business failure after losing a major customer, illness, a partnership that went wrong — explain it plainly.
- What’s different now. Better bookkeeping, a different structure, an accountant on board, a stronger customer base.
- Security. Your own property, or a partner’s or family member’s property offered with their agreement (see using a partner’s property).
- A realistic amount. Start with what the business genuinely needs.
Our guide on explaining your situation to a lender has a simple one-page structure that works well for ex-bankrupts.
An illustrative example
This is an illustrative example, not a real person.
A builder went bankrupt in 2020 after a developer client collapsed. He was discharged in 2023, rebuilt as a sole trader doing renovations, and bought a modest home with his partner in 2025. Now he wants $70,000 for a tipper and trailer to take on bigger jobs.
- His bankruptcy is still on his credit file and permanently on the NPII. He puts it in the first line of his enquiry.
- Since discharge, his credit file is clean and his business account shows three years of steady trade.
- An unsecured lender declines because of the bankruptcy. A second mortgage over the home, with his partner’s agreement, is considered on the equity and his trading since.
What if my bankruptcy was because of a company failure?
That’s common, and the two often get tangled. If a company you ran went into liquidation too, see our page on a previous company being liquidated. If you used a debt agreement rather than bankruptcy, our debt agreement page covers the differences.
What should I do in the first year after discharge?
The first year after discharge is when you build the record a future lender will read. A few habits make a real difference:
- Get your credit report from Equifax and Experian — free every three months — and check the bankruptcy is recorded correctly with the right dates.
- Pay everything on time. Phone, utilities, rent, any small credit you take on. Clean repayment history after discharge is powerful evidence.
- Keep business banking tidy. One account, regular deposits, no dishonours.
- Stay current with the ATO. Lodge on time, pay on time. See behind on BAS if things slipped.
- Avoid unnecessary applications. A string of credit enquiries straight after discharge looks like desperation. Our too many enquiries page explains why.
- Think about structure. If you plan to run a company, check with your adviser that no other disqualification applies.
When you’re ready to borrow, you’ll have a clear before-and-after story: what went wrong, when it ended and what the last year looks like. That story, plus security, is what opens doors.
It’s also worth remembering that each lender’s policy is different. One may not consider anyone with a bankruptcy still showing on their credit report, while another is comfortable once discharge is a year or two behind you and there’s property security. That difference is exactly why a matched introduction beats applying blindly, and why a real person reading your story matters more here than almost anywhere else.
Start a straight conversation
Coming back from bankruptcy takes grit. If you’re discharged and the business has a genuine need, it’s worth finding out what’s possible.
You can enquire with no credit check, and your story stays with one real person rather than being broadcast to every lender around. Please be completely open on the form about the bankruptcy — when it started, when you were discharged and what property is available. Accurate answers are the fastest way to a lender who’ll genuinely consider you. Start your enquiry.
Frequently asked questions
Can I get a business loan while I'm still bankrupt?
It's very unlikely. While bankrupt, there are restrictions on obtaining credit and running a business, and you can't be a company director. Most lenders will only consider you after discharge.
How long does bankruptcy last?
AFSA says bankruptcy normally lasts three years and one day from when your bankruptcy form is accepted. It can be extended in some circumstances if the trustee objects.
Does bankruptcy ever come off my record?
It comes off your credit report after the later of five years from when you became bankrupt or two years after it ended. But your name stays on the National Personal Insolvency Index permanently, and lenders can search it.
Can I be a company director after bankruptcy?
An undischarged bankrupt can't manage a company. After discharge, that restriction lifts unless other disqualifications apply.
Should I tell a lender about an old bankruptcy?
Yes, always. Lenders can find it, and being upfront builds trust. Hiding it is far more damaging than the bankruptcy itself.