Will the ATO Bankrupt Me?

Yes, the ATO can bankrupt individuals. Indeed, financial structures can be complex. As a result, under bankruptcy, your financial situation is fully investigated by a trustee. Otherwise, without clear disclosure, it can be difficult to identify all assets available to sell & pay off a debt.

A bankruptcy trustee has the power to seize assets allowed under the law. Plus, they can freeze bank accounts and investigate your assets to determine what can be sold. In contrast, the ATO cannot always know if you have a large hidden asset base or no assets to sell to repay the debt.

Keep in mind, the ATO treats individuals and businesses differently. Indeed, for businesses, the ATO will wind up the business through an involuntary business wind-up or liquidation.