Bankruptcy notice

If someone owes you or your company $10,000 or more you may be able to apply for a bankruptcy notice. This is a formal demand for payment based on a final judgment or order.

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Bankruptcy notice

The final judgment must be for $10,000 or more and no more than 6 years old.

A bankruptcy notice gives the person 21 days to comply from the date you serve the notice. If they don't, they are committing an act of bankruptcy.

Have you received a bankruptcy notice? If you haven't paid your debts, the person or organisation you owe money to may serve you with a bankruptcy notice. More information can be found on I’ve been served with a bankruptcy notice.

Before I apply for a bankruptcy notice

Before you apply, we recommend you search the National Personal Insolvency Index (NPII) to confirm the person is not already bankrupt or involved in a debt agreement or personal insolvency agreement.

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How do I apply for a bankruptcy notice

You must register to use our online services to apply for a bankruptcy notice.

Bankruptcy notice applications can only be made online.

Individuals

If you do not work for an organisation with an ABN you will need to register to use the online service as an individual creditor and set up an individual username and password.

Organisations

If you work for an organisation with an ABN, you can register to use the service as an organisation using your Digital Identity.

Digital Identity is a simple, safe, and secure way of proving who you are when you want to access services online. Set it up once, and then reuse it whenever you are asked to prove who you are. One of the benefits is that you don’t need to remember passwords.

To learn more about it, refer to the Digital Identity website.

Fees

You must pay the application fee when applying for a bankruptcy notice. Extensions of time to serve a bankruptcy notice require payment of additional fee.

Creditor bankruptcy notices

How do I calculate interest?

You may need to seek legal assistance or contact the court that issued the final judgment for help.

Our online service provides you with an interest calculation tool. However you should be aware that, where a judgment includes interest, you can only claim this interest in your application if:

  • The court that made the judgment or order has allowed it.
  • You specify the amount of interest.
  • You attach a schedule in your application. This should show how you calculated the interest and the legislation you’re using to claim the post-judgment interest.
  • It's your responsibility to ensure you have calculated the interest correctly.

Note: You can't include post judgment interest to make up the minimum of $10,000 we require for bankruptcy notice applications.

Can I include more than one person on the bankruptcy notice?

Yes, as long as all people on your bankruptcy notice application are listed on the judgment or order.

The names on the judgment and names on the application must be identical.

If the person's name doesn't appear on the judgment, you can't include them.

If there are separate judgments or final orders, you must lodge applications for separate bankruptcy notices for each person.

Can I request a bankruptcy notice for an overseas debt?

Yes, however;

  • you must register the judgment or order in an Australian court
  • we may ask for details to confirm this registration
  • the creditor must be in a position to serve the notice within 6 months
  • if the judgment/order is in a foreign currency you must convert it to Australian currency. To do this you need to source the current telegraphic transfer rate from a banking institution. You must do this within two working days prior to submitting your application.

Is a bankruptcy notice effective if the person that owes money lives overseas?

Yes, as long as it satisfies the necessary bankruptcy notice requirements. You may wish to seek your own legal advice.

Once you've successfully applied for a bankruptcy notice, you need to serve it on the person named in the notice. To serve a notice on someone means you are delivering or presenting a legal document.

The person (or debtor) then has 21 days to comply with the notice. If they don't, you may be able to prove that the person has committed an 'act of bankruptcy'.

How do I serve the bankruptcy notice?

You must serve the bankruptcy notice within six months of the date we issued it.

The person then has 21 days to comply with the notice from the date you served it. 

Given the significant consequences of non-compliance with a bankruptcy notice, including potential bankruptcy proceedings in the court, you should consider personal delivery to the debtor. Court rules require that an affidavit of service of the bankruptcy notice be filed with an application for a creditor’s petition.

However, there are several ways you can serve a bankruptcy notice:

  • personal delivery (you may choose to serve the notice in person to ensure direct receipt)
  • post
  • courier
  • email.

You should seek legal assistance about the best method to serve a notice.

What happens if I can't serve the notice?

You can apply to the Federal Court or Federal Magistrates Court for an order of substituted service. Substituted service is a method of delivery on a person other than in-person and subject to the courts permission.

You may wish to seek your own legal advice.

Can I amend a bankruptcy notice?

Yes, in some cases. You must have a court order to amend a bankruptcy notice. You must apply to the court to get an amendment order. Contact the Commonwealth courts for more information.

We only make amendments if you haven’t served the bankruptcy notice. If you have already served the notice, you must pay for a new application.

If you need to amend a bankruptcy notice without a court order, you must pay for a new application.

When a court has ordered an amendment, follow these steps:

  • log in to Online Services
  • upload your court order
  • to change the originally issued bankruptcy notice - draw a line through incorrect information and write the new information next to it
  • upload the endorsed copy of amended bankruptcy notice
  • submit.

We don't charge a fee for this process; however, you may need to pay court costs.

If we accept it, we endorse the notice with the date we made the amendment.

You then have six months to serve the notice from the date of amendment.

Can I extend a bankruptcy notice?

Yes, in certain circumstances. You have six months from the date of issue to serve a bankruptcy notice. If you can't serve it during this time you can make an application for an extension. A fee applies - see Fees and charges.

To request an extension:

  • log in to Online Services
  • provide a statement with the reasons you require the extension.
  • include service attempt details
  • pay the fee
  • submit.

How long do you have to apply for a bankruptcy notice extension?

  • Normally you need to apply for an extension within six months of the issue date.
  • You can request further extensions of time after this for six months at a time.
  • You may apply for an extension more than six months after the issue date. However, we will only grant this under exceptional circumstances.

The person has paid the debt. Do I need to tell AFSA?

No, you are not required to tell AFSA if the person pays the debt. 

Does the National Personal Insolvency Index (NPII) record bankruptcy notices?

No. However, if you file a creditor's petition with the Federal Court or Federal Circuit Court:

  • the creditor's petition details appear on the NPII and
  • the bankruptcy notice is then available for public inspection.