With certain exceptions, when the bankruptcy is discharged (or the court grants an annulment), a bankrupt is released from all debts incurred before bankruptcy.

Those debts included in the bankruptcy are often referred to as ‘provable debts’. Creditors for these debts are entitled to payment from the bankrupt estate but at the end of the bankruptcy period the bankrupt is released from the debt.

The types of debts covered by bankruptcy include:

Unsecured debts incurred before the bankruptcy such as

Secured debts - once the debtor defaults on payments the creditor has the right to sell the asset to reduce the debt and the Bankruptcy Act 1966 does not generally affect this. However, any shortfall between the sale of the asset and the debt is covered by bankruptcy as a provable debt.

Other examples include: