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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 – a formal demand for payment.
Read the bankruptcy notice carefully to understand all your options and when you need to take action. Don't leave it too late to act.
You have 4 options:
1. Pay the amount owed
Where the bankruptcy notice was issued, you generally have 21 days to pay the amount owed. In some instances, this timeframe can differ, so please read the details on the notice carefully.
If you don't pay the amount owed, you may be committing an 'act of bankruptcy'. Your creditors may use this to make you bankrupt by order of the court. We call this a sequestration order.
2. Reach an alternative agreement with your creditor
Where the bankruptcy notice was issued, you have 21 days from the day you receive the notice to come to an agreement with your creditor. Contact your creditor to discuss payment options.
3. Make an application to the court
You have the option to make an application to the court to set aside the judgment or order that led to the bankruptcy notice being issued or to set aside the bankruptcy notice. You may wish to seek your own legal advice about this.
If you are thinking about making an application, please allow the court reasonable time to receive and assess your application before the bankruptcy notice period expires.
There may be limitations on when you can file an application depending on the time or day of the week. To find out more, contact the Federal Court.
4. Don't pay the amount owed and don't reach an agreement with your creditor
If you do not meet the demand for payment, you may be committing an 'act of bankruptcy'. Your creditors may use this to make you bankrupt by order of the court. This is called a sequestration order.
Has a creditor already made you bankrupt?
If a creditor makes you bankrupt through a sequestration order in court, it's important that you seek advice and understand your obligations and the consequences of bankruptcy.
If you don't act quickly and comply with your obligations, you could remain bankrupt indefinitely and could face penalties.
Where to get help
We suggest you also seek your own independent legal advice about the bankruptcy notice you've received. For more information see Seek legal assistance.
You can also get help from a financial counsellor to consider your options. Their services are free, independent and confidential. They can provide advice about your financial situation and recommend the best option for you to deal with unmanageable debt.
To speak with a free financial counsellor contact the National Debt Helpline on 1800 007 007.
For more information on financial counsellors and other support services see Where to find help.