Declaring bankruptcy now costs $120

As if being broke was not already awful, it will now cost $120 to declare bankruptcy.

The fee, introduced to by the Abbott government last week, will be payable to the Australian Financial Security Authority (AFSA), which could make $2 million a year from it.

The move has drawn criticism from consumer advocates and financial counsellors.

''If people can't afford the fee, they will either remain trapped in debt or ask charities to pay the fee for them,” Financial Counselling Australia executive officer Fiona Guthrie told The Age.

The Greens and Labor are expected to oppose the laws in the Senate when Parliament returns.