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Bankrupting Someone Important Update Changes to Bankruptcy Notices - Notice to creditors applying for the issue of a Bankruptcy Notice for a Debt of less than $5,000 (PDF) . The Roles of ITSA, the Federal Court & the Federal Magistrates Court From 16 December 1996, the Insolvency and Trustee Service of Australia (ITSA) took over some of the administrative functions previously carried out by the Registrar in Bankruptcy. These include the maintenance of a national index of all personal insolvencies, called the National Personal Insolvency Index (the NPII), and the issue of Bankruptcy Notices on behalf of creditors, upon which subsequent bankruptcy proceedings may be based. The Federal Court of Australia & the Federal Magistrates Service (“the Court”) are responsible for challenges to Bankruptcy Notices, the issue and hearing of Creditor’s Petitions for bankruptcy and other applications in relation to bankruptcy matters, although ITSA must be informed of certain matters in relation to Creditor’s Petitions. Bankruptcy Procedure in Brief For a creditor to make application to the Court for the bankruptcy of a debtor, the creditor must first establish that the debtor has committed an ‘act of bankruptcy’. These are set out in section 40 of the Australian Bankruptcy Act, 1966. The most common act of bankruptcy relied upon is that a debtor has failed to comply with a Bankruptcy Notice, requiring the creditor’s debt to be paid within 21 days. Further information is available on the process by which a creditor can obtain the issue of a bankruptcy notice. The creditor must serve the Bankruptcy Notice on the debtor within 6 months of issue. The Official Receiver (ITSA) may extend this time. A creditor may make application to the Court for substituted service. Any challenge by the debtor to the Notice must be made to the Court. If the debtor does not comply with a Bankruptcy Notice within 21 days of service (and the notice has not been set aside) or some other act of bankruptcy has occurred the creditor may proceed to make application to the Court for a Creditor’s Petition to be issued. Details of the forms and fees for such an application can be obtained from a registry of the Federal Court of Australia or the Federal Magistrates Court. Federal Court of Australia filing, forms and fees Court Forms and Fees: Federal Magistrates Court of Australia The Court has requirements for the debtor to be served with certain documents in the course of the proceedings, and the creditor may have to file various affidavits with the Court to establish service and other matters relevant to the petition. There may be several hearings of the petition in the Court. If the Court is satisfied that the correct procedure has been followed and that the debtor should become a bankrupt, it will make a Sequestration Order against the debtor. A Sequestration Order is an order making a person or persons bankrupt. There are detailed explanations of the creditor's petition process at both the Federal Court and Federal Magistrates Court websites. Creditors are required to search the NPII no earlier than the day before the hearing date for a Sequestration Order to ascertain whether the debtor is involved in other personal proceedings. The NPII is maintained by ITSA. During the process a number of documents must be lodged with ITSA. Further details are available. Further information is available on how and where to obtain a search of the NPII. Sending a person bankrupt is a complex process. If you wish to do so or to defend an action by a creditor to send you bankrupt, you should not rely upon this information. You should seek your own independent legal advice.

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