21 days after Bankruptcy Notice has been issued and served, a Creditors Petition can be issued to continue the debt recovery process. Please note that the below is general information only and does not constitute legal advice, and you should contact us to discuss your specific circumstances so we can help you effectively collect your debt.
The issuing of a Creditors Petition with the Federal Magistrates Court (or Federal Court) is the last step to be taken, and the step that seeks orders from the Court to make the debtor bankrupt. Like the Bankruptcy Notice, to apply for a creditors petition the amount outstanding must be over $5,000.
When reaching this step in the debt collection cycle, we use our lawyers for this process due to the strict formalities in place surrounding this process. The filing fee for a creditors petition is $3,075 for companies and $1,280 for individuals (as at September 2014). Our lawyers fees for matters that are not complex are typically $2,500 + GST. Owing to the cost of this process, you want to be fairly certain that your debt will be paid.
An Affidavit is required by you (the Petitioning Creditor) to be filed with the Creditors Petition.
After the Creditors Petition has been prepared and lodged, the Court will allocate a hearing date. The Creditors Petition must be served personally on the debtor, so as the debtor is presented with an opportunity to attend the hearing. It is at this hearing where it can be decided by the Court whether or not a Sequestration Order is granted which has the effect of a Trustee being appointed to the debtors financial affairs and the debtor is declared Bankrupt. Should the matter be defended by the debtor, a new date will be decided to bring the matter before a Magistrate or Judge.
The next step in this process is the Sequestration Order, and what impact this has on your debt collection activity.