If somebody owes you a debt of over $5,000, and you want to declare this person bankrupt, you have to file a creditor’s petition in the Federal Court or Federal Circuit Court of Australia. By filing a creditor’s petition, you are applying to the Court for an order that the estate (assets) of a debtor be sequestrated, making them bankrupt.
In those proceedings, the creditor is referred to as the applicant, and the debtor is the respondent.
To enable you to file a creditor’s petition, you need to prove that the person has committed an ‘act of bankruptcy’ which has been committed within the last 6 months prior to presenting the petition. The most common act of bankruptcy is the failure to comply with a Bankruptcy Notice.
Other acts of bankruptcy include:
- Leaving Australia or keeping house, with the intent to defeat or delay your creditors;
- Signing a proposal for a Debt Agreement;
- Signing a 188 Authority to initiate a Personal Insolvency Agreement;
A creditor’s petition requires certain documents to be filed with the petition. Some of these documents include an affidavit verifying the debt, and affidavit of search, and an affidavit of service of the bankruptcy notice.
If you are thinking about serving a creditor’s petition, get in touch with us now to discuss your options with an experienced Bankruptcy Lawyer in Sydney.