Legal Project Management Plan & Checklist
Purpose of this Guide: Use this plan when your client is facing serious unmanageable debt and either wants to explore voluntary bankruptcy as a fresh start, or is responding to a creditor's bankruptcy notice or petition. Bankruptcy provides protection from creditors and, in most cases, discharges most debts after 3 years. Open this plan at first instructions when the client's debts exceed their assets and they cannot meet their obligations as they fall due.
Jurisdiction: Federal Court of Australia or Federal Circuit and Family Court of Australia (Division 2 - General Federal Law) for contested matters. The Australian Financial Security Authority (AFSA) administers both voluntary and involuntary bankruptcies. Forks address two specific situations: applying to set aside a bankruptcy notice (to buy time or challenge the debt), and voluntary sequestration (the debtor petitions for their own bankruptcy).
The Process at a Glance: Review the client's financial position including all debts, assets, income, and expenses. Advise on the consequences of bankruptcy including asset realisation, income contribution assessments, restrictions on travel and business directorships, and the 3-year period before discharge. If the client wants to defend against a creditor's petition, identify any genuine dispute about the underlying debt. If the client wants voluntary bankruptcy, complete and file the debtor's petition with AFSA. AFSA appoints a trustee who takes control of divisible assets. After 3 years (or up to 8 years if objected to), the bankrupt is automatically discharged.
Use this fork when a creditor has served a bankruptcy notice on your client and the client believes the underlying debt is genuinely disputed or has a counter-claim that equals or exceeds the debt. Applying to set aside the bankruptcy notice is the primary way to prevent an act of bankruptcy from occurring and to preserve the right to contest the debt in the appropriate forum.
Use this fork when your client has decided to file for voluntary bankruptcy because they cannot repay their debts and want the legal protection and fresh start that bankruptcy provides. The debtor files their own petition directly with AFSA without needing to go to court.
Key Legislation and Case Law: Bankruptcy Act 1966 (Cth) - s 54 (debtor's petition), s 55 (automatic discharge after 3 years), s 58 (vesting of property), s 116 (exempt assets), ss 139L-139ZF (income contribution). AFSA - applying for bankruptcy. Exempt assets include tools of trade up to the indexed threshold, a vehicle up to the indexed threshold, and ordinary household furniture. Superannuation is generally protected. After discharge, most provable debts are extinguished (exceptions include student debts, court-ordered child support, and fines).
* 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 (Debtor) 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.
Conduct initial onboarding, verify identity, clear conflicts, and assess urgent creditor risks.
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Formally audit all secured and unsecured liabilities and calculate divisible vs exempt assets.
Advise on informal options, Part IX Debt Agreements, Part X Personal Insolvency Agreements, and voluntary bankruptcy.
Finalize strategy selection based on thresholds, clawback risks, and personal/professional impacts.
Deliver formal advice, obtain signed authorization, and transition to specific filings.