A Bankruptcy Notice is a very serious legal document, and is the first step that a creditor takes in order to make you bankrupt. If you receive a bankruptcy notice you need to act quickly, because you have limited options and not a lot of time to do it in.

A creditor can have you issued with a bankruptcy notice if you owe them more than $10,000 and they have already had a court judgement for it made against you. The laws surrounding bankruptcy notices are fairly strict, so if you do get one, you can be fairly certain that it has been done legitimately and correctly. You will be required to respond to the notice, either by paying out the debt, or applying to the Court to have the time period extended or the notice set aside – but it would only be set aside if it was wrongfully issued or contained material errors.

You have 21 days to respond to a bankruptcy notice. If you do not respond within 21 days of it being served on you, you will be considered to have committed an “act of bankruptcy”. The creditor can then use this to have you issued with a Creditor’s Petition.  Once a Creditor’s Petition has been issued you will become bankrupt unless you appoint a Controlling Trustee or Propose a Debt Agreement.

If you have been issued with a bankruptcy notice, the one thing that you simply cannot do is ignore it in the hope that it will go ok – it will not! You are extremely close to being made bankrupt and you need to act quickly and decisively. You cannot act without advice though, so you should call the Australian Bankruptcy Service. Here at the ABS we have a dedicated team of consultants with years of experience giving advice about bankruptcy, and our CEO is a Registered Trustee in Bankruptcy. We can help you to ascertain what your options are and what your next step should be. Call us on 1800 1800 462 767 at the very first sign that you are at risk of facing bankruptcy.