The decision to go bankrupt should only be taken after considering who can voluntarily enter bankruptcy and the advantages and disadvantages of doing so. Always get advice first to discuss if there are other options available to deal with debts.

To go bankrupt voluntarily, a person will need to complete and lodge a Bankruptcy Form (legally known as a debtor's petition), available from the Australian Financial Security Authority. The form will request financial information including income, assets, debts, any businesses the applicant is a part of and any current court cases they are involved in. The applicant will also need to prove their identity with identity documents. Bankruptcy can be applied for online or by posting in a completed form. Visit the Australian Financial Security Authority's website for more information.

The value of the person's interests in assets must be clearly shown. For example, jointly owned furniture valued at $2,000 should be shown as a half-share worth $1,000. Joint debts should be shown in full, because each joint debtor is fully liable for payment of the debt and the liability cannot be divided. For example, a joint debt of $3,000 should be shown on each individual statement as $3,000. For joint secured debts, use the total amount of the debt, less the value of the security, to calculate the deficiency or the equity in the asset. Each debtor is solely responsible for the deficiency, so this amount should be shown in full. If there is equity in the asset, this equity is shared and the amount should be halved to show the individual's share.

The Official Receiver will determine whether to accept or reject an application for bankruptcy or debtor's petition. A petition may be rejected if [Bankruptcy Act 1966 (Cth) s 55]:

Before the Official Receiver will reject a petition, the debtor will be contacted to obtain further information and told the intended course of action.

A debtor can apply to the Administrative Review Tribunal for a review of the decision by the Official Receiver to reject their petition.

Where the Official Receiver accepts the forms, a bankruptcy number is allocated. The client is deemed to have been bankrupt from midnight of the night before. The bankrupt may be interviewed immediately or may simply be asked to provide detailed written information or documentation. Alternatively, if a registered trustee has consented to act, they may arrange documentation and the interview.

The trustee may ask for the bankrupt's passport and for copies of all contracts and documents relating to the debts. The trustee may also request information about the bankrupt's assets.

Depending on the assets that are available for sale and distribution among creditors, the trustee will make a number of decisions. If assets are of very low value, the trustee may ask the bankrupt to sell the goods personally rather than incur the expenses of finding a buyer. The trustee may even be prepared to accept less than market value where costs will be saved by not seizing and selling the goods.

Where the bankrupt wishes to retain the use of the goods, such as a car, a friend or relative may be prepared to make the trustee an offer. The trustee will almost always cooperate in these circumstances.