A Bankruptcy Notice is a document issued by the Official Receiver at the request of a creditor that has a final judgment or order for payment of money against a debtor. It requires the debtor to pay or secure to the creditor the amount claimed in the notice within the specified period of time, usually being 21 days after it is served. The monetary claim in a bankruptcy notice must be at least $5,000 but can be based on one or more judgments or orders and issued within 6 years of the date of the judgment. An application for a Bankruptcy Notice can be made online.
Given the significant impact that bankruptcy can have on an individual, the issue of a Bankruptcy Notice can be a very effective tool for getting paid the amount of money owed to a creditor.
Bankruptcy Notices can be served in a variety of different ways including sending by post to the debtor’s last known address, personally served or sent by fax or electronically. It is usually preferable to serve the debtor personally where that is possible as proof of service will be required if it is being relied on to bankrupt the person by way of a creditor’s petition although where they can’t be located an order for substituted service from the Federal Circuit Court or Federal Court can be obtained. There are time periods within which a Bankruptcy Notice needs to be served, being 6 months from the date of issue unless extended by the Court where the debtor has been difficult to serve.
Where a debtor fails to comply with a Bankruptcy Notice, the debtor commits an act of bankruptcy and the creditor can then consider whether to petition the Federal Circuit Court or Federal Court for a Sequestration Order.
As there are strict time frames to respond to a Bankruptcy Notice, if served with a notice and the debtor wants to dispute the notice, they should take urgent steps and obtain legal advice to see if they are able to set aside the notice.