A bankruptcy notice can be set aside for various reasons but including if the notice misstates the amount of the debt. The Federal Circuit Court requires strict compliance with the Bankruptcy Act because it sets in trail the process for a person leading to bankruptcy. If it is defective and can’t be fixed, it will be set aside.
If served with a Bankruptcy Notice, a debtor should either pay the amount claimed within the period specified or take steps to challenge the notice. Challenging the underlying judgment on which the notice is based, such as applying to set aside a judgment or an appeal from the judgment or order, are common grounds for applying to set aside a notice. There is only 21 days after being served to decide what to do. Some of the reasons for challenging a Bankruptcy Notice can include:
To set aside a notice, an application needs to be made to the Federal Circuit Court or Federal Court. The period of time within which to comply with the notice can be extended but usually the application should be filed before it expires.
If an application is not made or is not successful, an act of bankruptcy will have occurred and the creditor may present a petition asking for a sequestration order against the debtor.