Legal Project Management Plan & Checklist
Purpose of this Guide: 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.
Jurisdiction: or (Division 2). The application must be filed before the bankruptcy notice expires (21 days from service, or as extended by the court).
The Process at a Glance: Read the bankruptcy notice carefully. Confirm the debt amount and the judgment or order on which it is based. If the debt is disputed or there is a counter-claim equal to or greater than the amount claimed, file an application to set aside immediately - do not wait. The application must be filed and a stay obtained before the 21-day period expires, otherwise an act of bankruptcy occurs. Prepare an affidavit setting out the grounds for disputing the debt. Attend the hearing and present evidence of the genuine dispute.
Key Legislation and Case Law: Bankruptcy Act 1966 (Cth) s 41(7) - court may set aside a bankruptcy notice if the debtor has a counter-claim, set-off, or cross-demand equal to or exceeding the debt. Federal Court (Bankruptcy) Rules 2016 (Cth). The dispute must be genuine and based on substantial grounds - a mere assertion of dispute is insufficient: Ebert v Union Trustee Co of Australia Ltd (1960) 104 CLR 346.
* 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) - Set Aside Bankruptcy Notice Application 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.
Identify a valid counter-claim, set-off, or cross demand exceeding the judgment debt.
Draft the Form 2 Originating Application and supporting affidavit.
File within the 21-day window to trigger an automatic extension of time for compliance.
Attend the court hearing to seek orders setting aside the bankruptcy notice.
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