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ARTICLE · 08 MARCH 2026

What happens if I never pay my HECS debt?

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This article unpacks how HECS-HELP, tax debts, and tax refunds are treated once someone enters bankruptcy.

AustraliaInsolvency/Bankruptcy/Re-Structuring
Broghan Phillips
Broghan Phillips
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How tax debts and tax refunds are treated in bankruptcy

People often assume that bankruptcy provides a clean slate for all personal debts.

But when it comes to Commonwealth debts, particularly HECS-HELP and tax liabilities, the rules operate very differently.

The interaction between the Bankruptcy Act, the ATO's administrative powers, and income-contingent repayment systems means some debts survive bankruptcy while others do not. This article unpacks how HECS-HELP, tax debts, and tax refunds are treated once someone enters bankruptcy.

HECS-HELP: Why bankruptcy doesn't make it go away

The distinction between provable and non-provable debts is fundamental to how bankruptcy operates.

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