A bankruptcy notice, pursuant to section 41 of the Bankruptcy Act 1966 (Cth), is a notice that is issued by the Official Receiver to a debtor upon a creditor’s application. It is a demand for money in respect of a final judgment or order that:
- is for $5,000 or more (or two or more judgments taken together to be $5,000 or more)
- must be drafted strictly in accordance with the form prescribed by the regulations;
- must be validly served on a debtor; and
- must be complied within 21 days (or the number of days outlined in the notice) otherwise a debtor is deemed to have committed an “act of bankruptcy”.
A debtor can have the time period for compliance extended if:
- proceedings are commenced to have the original judgment or order set aside; or
- an application is made to set aside the bankruptcy notice.
Importantly, an “act of bankruptcy” will be deemed not to have occurred if the served bankruptcy notice is defective. However, if a bankruptcy notice is not defective, served in accordance with the Bankruptcy Act 1966 (Cth) and a judgment is failed to be satisfied within the stipulated time period, then a creditor will have grounds to petition a court to make a debtor bankrupt.