Once default Judgment is in place, and with no stay on Court proceedings a Bankruptcy Notice can be issued to continue the debt recovery process. Please note that the below is general information only, and you should contact us to discuss your specific circumstances so we can help you effectively collect your debt.
The Judgment debt must be over $5,000 to issue a Bankruptcy Notice and the Judgment Debt must be less than 6 years old. From our experience in collecting debts through this process, it is rare to explore this avenue for debts under $10,000. This is because of the cost involved in a Creditors Petition, which we will go through in a separate article.
The Australian Financial Security Authority (AFSA) is responsible for issuing (not serving!) Bankruptcy Notices. AFSA was previously known as ITSA (the Insolvency & Trustee Service Australia). AFSA charges $470 for issuing the Bankruptcy Notice. We instruct our solicitors at Collection Law Partners to prepare these for our clients, who charge a flat fee for simple straight forward matters of $400 (plus GST). The information required to issue a Bankruptcy Notice is lodged online with AFSA, submitted, and AFSA then issue the notice to the party who prepared it so it may be served.
It is essential that the Bankruptcy Notice is correct, which is why we use our lawyers. The Bankruptcy Notice must comply with the all of the necessary requirements, otherwise you will not be successful in issuing a Creditors Petition.
The Bankruptcy Notice is attached to the Court Judgment when issued by AFSA, and allows the debtor 21 days once served to comply. The next step which will be dealt with in a separate article is the service of a Bankruptcy Notice, as there are specific requirements for service.
The above article does not constitute legal advice and is only intended to be used as a guide to how Bankruptcy can be used to collect debts.