|September 19, 2017||0|
If you have received a bankruptcy notice or court order you must take action immediately to avoid future suffering. Owing someone else money referred to here as a creditor, may be any individual or organisation to whom you owe money. If you’re unfit to pay money to a creditor, the creditor will talk to the Australian Financial Security Authority (AFSA) who will subsequently deliver a bankruptcy notice demanding payment of that money.
Of course, there is a limit to the amount of money owing to creditors before they can consult the AFSA, and the minimum amount is $5,000. Once the creditor has secured a final judgment, AFSA will issue you with a bankruptcy notice.
It’s crucial that you take swift action if you receive a bankruptcy notice from the AFSA. You will commit an ‘act of bankruptcy’ if you fail to do any of the following:
Committing an act of bankruptcy suggests that you give your creditor permission to apply to the Federal Circuit Court for a sequestration order, or in simple terms, an order that will make you legally bankrupt.
How does a Bankruptcy Notice get served to me?
A bankruptcy notice could be served to you in several ways; it may be validly served to you individually, by regular post, or hand delivered to your registered address. In a number of situations, a bankruptcy notice could be served in a digital form, either by means of fax or email.
If it’s not achievable for a creditor to serve a bankruptcy notice using any of these methods, a court order can be secured which permits creditors to serve the bankruptcy notice in a separate way.
I have a bankruptcy notice, now what?
To fulfill a bankruptcy notice, you must do one of three things:
It is crucial to note that all of these actions must be taken inside the timeframe set out in the bankruptcy notice (usually 21 days from the date of the notice).
Can I get my Bankruptcy Set Aside?
If warranted, you can apply to the court to have the bankruptcy notice cancelled or set aside. This must never be taken lightly however, because if there are insufficient grounds to make an application then you will be obligated to pay all the creditors legal expenses which only bloats the debt you owe to them.
If you do apply for your bankruptcy notice to be set aside, it’s always a sensible idea to request that the court lengthens the timeframe for compliance with the bankruptcy notice, so you keep away from committing an act of bankruptcy while the court processes your application. Basically, don’t leave it to the last minute.
To have your bankruptcy notice set aside, one of the following conditions must apply:
What if the debt claimed on the bankruptcy notice does not exist?
To validate that the debt claimed on your bankruptcy notice does not exist, you have to produce evidence that:
In your application to set aside the bankruptcy notice, you can not simply say that you have a convincing argument to do so. You must have already submitted the relevant documents with the court that handed down the order. Along with this, you must have the ability to produce evidence to the Federal Circuit Court that displays that you have an authentic case for grounds of appeal.
Furthermore, if you do not start the process of setting aside the judgement or order before filing your application to set aside the bankruptcy notice, the Federal Circuit Court will not be able to lengthen the timeframe for compliance under sections 41( 6A) and 41( 6C) of the Act. For this reason, you will have committed an act of bankruptcy.
What is a Defective Bankruptcy Notice?
A defect in the form or content of the bankruptcy notice happens when the creditor has failed to fulfill the requirements of the Act, in which case you might have grounds to make an application for the bankruptcy notice to be set aside. Some defects are more critical than others, and not all defects will make a bankruptcy notice invalid as these defects can be remedied at the discretion of the court under s 306( 1) of the Act.
In general, the defect must be considerable or create confusion over the actions you must take to satisfy the bankruptcy notice for you to have the capability to set aside the bankruptcy notice.
There are some imperative requirements of a bankruptcy notice and if these requirements aren’t met, the bankruptcy notice will consequently be void. The following provides some examples where these crucial requirements have not been met:
The following specifies some situations where bankruptcy notice defects have not been substantial enough to make them invalid:
There are several other legal requirements that should be kept in mind. These include:
Under what grounds could I counter-claim, set-off or cross demand?
To succeed using the grounds of counter-claim, set-off or cross demand, you will have to proficiently demonstrate to the court the following two items:
What is an Abuse of process?
An abuse of process occurs if you can substantiate that the reasons behind the bankruptcy notice is to pressure you to pay a debt, in contrast to a genuine effort by the creditor to invoke the court’s jurisdiction in relation to bankruptcy. If the former is true, then you will have the opportunity to set aside the bankruptcy notice due to an abuse of process. To be successful using these grounds, you will need to present evidence of collateral purpose or unnecessary pressure.
What If I believe I have grounds to act on one of these items above?
If you believe you have a case for one of the previously mentioned reasons to rebut your bankruptcy, you will need to get the following documents prepared, filed, and served to apply for your bankruptcy notice to be set aside:.
You can get the requirements for an application to set aside a bankruptcy notice in rule 3.02 of the Rules. You can either make an application for a final order or an interim order.
Final orders have to describe the ideal result you want to receive and the legislative basis which the court can grant this decision. An example of a final order might be: “That bankruptcy notice (BN00231) issued on 15 June 2017, which was served to me on 1 July 2017, be set aside under section 30( 1) of the Bankruptcy Act 1966.” You would also have to produce a copy of the bankruptcy notice with your application.
However, an interim order has to outline any outcomes you wish before the application is finally decided upon, and the legislative basis which the court can approve this decision. An example of an interim order might be: “The time for compliance with bankruptcy notice (BN00233) be lengthened up to and including 7 days after the outcome of this application by the Court under section 41( 6A) of the Bankruptcy Act 1966.”.
If you elect to make an application, it must be accompanied by an affidavit which illustrates the grounds of your application in conjunction with the date the bankruptcy notice was served to you. If you’ve already made an application to set aside the judgement of the bankruptcy notice, a copy of this application/s also needs to be attached. It’s essential that your affidavit must satisfy rule 3.02 of the Rules, otherwise your application may be declined and your request for an extension of time to follow the bankruptcy notice may not be approved.
Filing your application.
As soon as your documents are finalised, they will need to be filed with the courts either online or in person at the Federal Circuit Court Registry.
There is a lodging fee that will need to be paid, however in various situations you can apply for a waiver of this fee.
Serving your documents.
Once you’ve lodged your application and affidavit and they have been stamped, you must personally serve these documents to the creditor within 3 days after the documents have been filed.
If you are an individual, you must personally take the documents to the person identified on the document and give it to them. If they choose not to take the documents, the person serving them may place the document in the presence of the person to be served and verbally notify the individual what the documents consist of.
If you are a business, you must personally visit a registered office of the company and give the documents to an individual servicing that company. You don’t need to deliver the documents to the company’s principal business, the Australian Securities and Investment Commission (ASIC) will provide you with a list of that company’s registered addresses.
If you would prefer someone else to serve the documents, you can get a bailiff of the court or a process server to serve the documents for a fee.
If you’re not sure whether you have grounds to set aside the bankruptcy notice, or you’re skeptical whether you should devote the time and money to apply because of financial reasons, talk with Fresh Start Solutions Sunshine Coast on 1300 818 575 for free advice. As an alternative, you can visit our website for more information: http://freshstartsolutions.com.au/bankruptcy-sunshinecoast