If you can't pay your business debts, and haven't been able to reach an agreement with your creditors, you may decide to go bankrupt.

If your application is accepted by the Insolvency and Trustee Service Australia (ITSA) it may last for up to 3 years or longer, according to the level of cooperation that the bankrupt shows to the trustee.

Bankruptcy will affect your day-to-day life. Among other things you may find it difficult to borrow money, you must have written permission from your trustee to travel overseas, it could affect your job opportunities and you'll probably need a bond to secure rent, electricity, water or telephone connections.

To find out more about filing for bankruptcy and your obligations visit the ITSA  and ASIC websites.

What's next...

• How do I close a sole trader?
• How do I close a business with employees ?
• What are my tax obligations when I close my business?