Bankruptcy Notice

1. If a creditor of yours has obtained a judgment against you then, subject to certain conditions, they can apply to the Official Receiver (the Australian Financial Security Authority – AFSA) to have a bankruptcy notice issued against you.
   
   
2. The main condition is that the judgment amount, plus accumulated interest and court ordered costs, exceeds the statutory minimum and remains unpaid. That amount is temporarily $25,000. However, depending on when the notice was issued (in the past and in the near future), the amount can also be $5,000. It is therefore very important to note the issue date of the bankruptcy notice.
   
   
3. When a creditor serves you with a bankruptcy notice, you only have a short amount of time to take action to comply with the notice requirements. The requirements are listed on the notice and are discussed further below. The time for compliance is currently six months, however, depending on when the notice was issued (in the past and in the near future), the time for compliance can also be 21 days. It is therefore very important to note the issue date of the bankruptcy notice.
   
   
4. The requirements to comply with a bankruptcy notice are:
   
   

   (a) pay the creditor the amount claimed in the notice; 

   (b) make arrangements to the creditor’s satisfaction for settlement of the debt; or 

   (c) to apply to the Court to set aside or extend the time to comply with the notice.
   
   

5. In respect of options (a) and (b), if you are unable to pay your creditor the amount claimed in the notice, you may want to consider your next options, which may include: negotiating agreements with your creditors; seeking financial assistance; applying for temporary debt protection with AFSA for up to six months; seeking to extend the compliance date on the notice or entering into voluntary insolvency by filing a debtors petition.
   
   
6. However, everybody’s situation is different, and it is likely yours will be too. The manner in-which these steps are considered, actioned and the results differ on a case by case basis. We can advise you on what steps may be most appropriate to your circumstances and can assist you in understanding and taking such steps. Send us an enquiry at your earliest opportunity so that we can begin doing so sooner rather than later.
   
   
7. In respect to option (c), if you believe that you can pay your debts or that you do not owe the creditor what is claimed in the notice, you may apply to have the bankruptcy notice set aside. If you would like more information on how to do so, send us an enquiry or continue to research on our website for an answer to your enquiry.