Once you have established your reasons and likely return of money from Bankruptcy proceedings, there are several steps to be taken before a Bankruptcy Notice can be issued. Please note that these steps are generalised, and you should contact us to discuss your specific circumstances and not rely on the below.
Some industries have specific compliance requirements before other action can be initiated. For example, in the Consumer Credit space, the full balance of the loan must be called up through the issuing and expiration of a default notice (don't forget to include your form 12 in this as well!).
A letter of demand from a lawyer or a debt collection agency will often have a different result to a letter of demand issued by you. You may find that your debt gets paid removing the need to proceed any further.
Court proceedings are commenced in the relevant court. In NSW, the Local Court has jurisdiction on claims of up to $100,000. The District Court has jurisdiction on claims up to $750,000. The Supreme Court has jurisdiction on claims over $750,000. These limits are unique to each Australian State and Territory.
Once your claim has been served and the relevant time period has elapsed, should the matter be undefended you can make an application for Default Judgment. You can find out more about this process in our resources section of the website which goes through this process for each State and Territory in Australia. Each jurisdiction has requirements for service and time periods before a Judgment application can be made.
Should your debtor complete an Instalment Order, unless you object (and have reasonable grounds for the objection), you will not be able to enforce your Judgment unless the instalment order is broken.
Once you have Default Judgment, should you not have a complete picture of the debtors financial circumstances you can have an Examination Notice issued, followed up by an Examination Order should no response be received after the Notice. This can assist you in determining whether or not you should proceed with your intention to pursue Bankruptcy proceedings. The debtor is required to provide you with the financial position together with supporting documentation. However, it is our preference wherever possible to have obtained the debtors financial position before court proceedings are commenced.
With Default Judgment in place and no stay on your enforcement actions in place, you are now in a position to issue a Bankruptcy Notice which will be discussed in our next article.