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If someone owes you $10,000 or more, you may be able to apply to the court to have the person made bankrupt. This is called a creditor's petition.
To do this, you need to prove that the person has committed an 'act of bankruptcy' within the six months prior to your application. These acts are listed in section 40 of the Bankruptcy Act 1966. The most common act of bankruptcy is failure to comply with a bankruptcy notice.
When you present a creditor's petition to the court, the court may make a sequestration order which makes the person bankrupt. For more information about this process, contact the court or seek legal advice:
If you wish to appoint a particular trustee, you must provide a Trustee consent to act declaration. Throughout the process of making someone bankrupt, you must file certain documents with us.
For more information see Make someone bankrupt.
Consider searching the National Personal Insolvency Index (NPII)
You will be required to search the NPII the day before the hearing. This proves the person isn’t already bankrupt or in another type of insolvency proceeding.
For more information see Bankruptcy Register Search.
Interim control orders
An interim control order is when a court orders the person's assets to be placed under the control of a trustee, prior to bankruptcy.
You may be able apply to the court for an interim control order if:
- you have obtained a bankruptcy notice or filed a creditor's petition
- you believe there is a risk of the person selling or disposing of assets before the before the court hears a creditor's petition, and
- the person who owes money is not yet bankrupt.
We encourage you to obtain independent professional advice as there may be legal implications when applying for interim control orders.
For more information see Official Trustee Practice Statement 7 - Section 50 interim control orders.