filing for bankruptcy in Australia

filing for bankruptcy in Australia

To apply to make a person bankrupt, a creditor must prove the debtor has committed an “act of bankruptcy”. These acts are set out in Section 40 of the Bankruptcy Act 1966. The most common “act of bankruptcy” relied upon is non-compliance with a bankruptcy notice.

A bankruptcy notice is a formal notice of demand requiring a debtor to pay a debt. This notice is issued by the Official Receiver for a fee. For the current fees refer to ITSA Fees and Charges page at www.itsa.gov.au or contact ITSA.

A bankruptcy notice must be based on a final judgment or order for at least $5,000 which is less than six years old. A bankruptcy notice can be based on more than one judgment or order so long as the total of all the judgment amounts is at least $5,000.

Interest on the judgment can only be claimed in the notice if:
it is allowed by the terms of the judgment or the rules of the court in which the judgment was given;
the amount of interest is specified;
and a schedule is attached to the notice showing how the interest claimed was calculated and the relevant sections of the legislation on which the creditor relies to claim post judgment interest