Making a deceased estate bankrupt

If a person passes away while they are insolvent[?], it may be possible to make their deceased estate bankrupt[?]. This is in accordance with Part XI of the Bankruptcy Act 1966.

To do this, you must apply to the Federal Court or Federal Circuit Court. For more information about the court process, forms and fees, contact them.

It is possible that state and territory probate laws deal with insolvent deceased estates.  You should seek legal assistance regarding this process.

People who can bankrupt a deceased individual are:

  • a creditor[?] of the deceased estate or
  • the administrator, executor or legal personal representative of the deceased estate.

For more information see Official Receiver Practice Statement 5 - Insolvent Deceased Estates.

If you are a creditor of a deceased estate

If you are a creditor[?] wanting to bankrupt a deceased estate, it is a similar process to a creditor's petition[?]. You must:

  • Present a petition to the Federal or Federal Circuit Court by filing with them:
    • Form 14 - Creditor's petition for administration of deceased person's estate - available from the court at fedcourt.gov.au
    • The court may also require you to provide affidavits in support of your application.
  • Prove that the deceased met the Australian connection requirements.
  • Prove that the deceased owed you and/or other creditors at least $5000. (There is no need to prove an 'act of bankruptcy'[?]).
  • You can choose to appoint a trustee[?] (this is not mandatory).
  • Serve a sealed copy of the petition on the deceased's legal personal representative, if they have one.
  • File a copy of the court application (with Form 14) with us within 2 working days of the court endorsing the petition.

If the court grants the creditor's petition administration order, this makes the estate bankrupt:

  • You must file a copy with us within 2 working days of the court endorsing the order.
  • We register the bankruptcy on the National Personal Insolvency Index (NPII).[?]
  • A trustee is appointed to manage the bankruptcy. If you don't nominate a trustee, we choose one for you.
  • We send a statement of affairs[?] to the deceased's legal personal representative to complete. They should file this with us within 28 days of them receiving notification.

If you are the administrator of a deceased estate

If you are the administrator (or executor or legal personal representative) of the deceased individual's estate, to bankrupt them you must:

  • Present a petition to the Federal or Federal Circuit Court. You need to include 2 forms with your petition:
    • Form 15 - Administrator's petition - available from the court here and
    • Form 4 - Statement of affairs under Part XI - available from us here
  • The court may require you to provide affidavits to verify your capacity to act on behalf of the deceased estate.
  • Prove that the deceased met the Australian connection requirements.
  • You can choose to appoint a trustee (this is not mandatory).
  • File with us a copy of the court application (with Form 15 & Form 4). You must do this within 2 working days of the court endorsing the petition.

If the court grants an administration order, this makes the estate bankrupt;

  • You must file a copy with us within 2 working days of the court endorsing the order.
  • We register the bankruptcy on the NPII.
  • We appoint a trustee to manage the bankruptcy. If you don't nominate a trustee, we choose one for you.

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