Legal Project Management Plan & Checklist
Purpose of this Guide: Use this plan when a client is owed money by an individual who has not paid and you want to pursue bankruptcy proceedings as a debt recovery tool. Bankruptcy is one of the most powerful remedies available to a creditor - it appoints a trustee to take control of the debtor's assets and distribute them among creditors. Open this plan when you have an unsatisfied debt of at least $10,000 and the debtor has committed an act of bankruptcy (typically by failing to comply with a bankruptcy notice).
Jurisdiction: Federal Court of Australia or Federal Circuit and Family Court of Australia (Division 2 - General Federal Law). The Australian Financial Security Authority (AFSA) administers the bankruptcy once a sequestration order is made. Forks address the specific process for issuing the initial bankruptcy notice and filing a creditor's petition.
The Process at a Glance: Obtain a judgment or final order for the debt if you do not already have one. Apply to the Official Receiver for a bankruptcy notice to be issued and served on the debtor. If the debtor fails to comply with the bankruptcy notice within 21 days, an act of bankruptcy has been committed. File a creditor's petition in the Federal Court or FCFCA within 6 months of the act of bankruptcy. Serve the petition on the debtor. Attend the hearing - if the court is satisfied the debt is owed and the act of bankruptcy occurred, it makes a sequestration order. The debtor becomes bankrupt and a registered trustee takes control of their non-exempt assets.
Use this fork when the debtor has committed an act of bankruptcy (most commonly by not complying with a bankruptcy notice within 21 days) and you are ready to file the creditor's petition to obtain a sequestration order making the debtor bankrupt.
Key Legislation and Case Law: Bankruptcy Act 1966 (Cth) - s 40 (acts of bankruptcy), s 41 (bankruptcy notices), s 44 (creditor's petition threshold), s 52 (sequestration orders), s 58 (vesting of property in trustee), s 116 (divisible property), s 122 (unfair preferences). AFSA bankruptcy portal: https://www.afsa.gov.au. The debt threshold for a bankruptcy notice is $10,000 (Bankruptcy Regulations 2021 (Cth) reg 4.01). The creditor's petition must be filed within 6 months of the act of bankruptcy: s 44(1). Exempt assets (tools of trade, necessary household property, certain superannuation) are protected under s 116(2).
* Disclaimer: We're nobody's lawyer, because we aren't lawyers. You are, so you know better than to take legal advice from an app. We also aren't accountants or dog trainers - just digital spirit guides taking zero liability for any of this. This site exists to gather the collective knowledge of practitioners like you. Verify everything and submit your feedback on the Personal Bankruptcy (Creditor) matter plan to improve the playbook. THIS IS NOT LEGAL ADVICE, it's a request for input.
This legal matter plan provides a structured workflow for COMMERCIAL_LAW cases, outlining the standard RESTRUCTURING process. Utilize these tracking templates to manage your legal cases efficiently.
Confirm the firm can act for the creditor and that the client understands the costs and risks of bankruptcy proceedings.
Successfully apply for and receive the issued Bankruptcy Notice from AFSA.
Effect personal service of the Bankruptcy Notice on the debtor.
Establish that the debtor defaulted within 21 days of service.
Ensure the creditor participates in the bankrupt estate distribution by lodging a valid proof of debt.
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