FAQs | Applying for Bankruptcy
When a creditor wants to make you bankrupt, they will need to ensure that your debt to them is over $10,000 and not more than 6 years old. The creditor can then lodge a Statement of Claim with the court for recovery of the debt. If the court finds in the creditor\’s favour, then a Judgment Debt will be made against you. The judgment debt can be used to launch a number of different recovery actions; garnishee, writ of execution, or rite for possession of the property. The Judgment Debt can also be used by the creditor to apply to the Court for you to be made bankrupt if you do not pay the debt. To do this the creditor will first need to apply to the Australian Financial Security Authority (AFSA) for a Bankruptcy Notice. AFSA will charge the creditor $470 for this. The judgment creditor must then have the Bankrupt Notice served on you, there are a variety of ways that service can take place. Once the notice is served, you will have 21 days to pay the debt, the Bankruptcy Notice is in effect a final demand. If you do not pay the debt or agree on a repayment arrangement with the creditor, the creditor can lodge a Creditor\’s Petition with the Court to make you bankrupt via a Sequestration order. If the court makes a Sequestration Oder against you, you are then bankrupt.
Nicholls & Co have a complementary ‘help desk’ to answer your questions on bankruptcy. Call Nicholls & Co on 1300 060 122 or email firstname.lastname@example.org.