Bankruptcy Notice

Bankruptcy Notice – What Is It

Whether you are looking for more information about bankruptcy or contemplating bankruptcy, our aim is to provide you with information that is easy to understand and assists you to navigate your financial circumstances.

Bankruptcy Notice Short Answer:

A Bankruptcy Notice is a formal demand for payment. It is a necessary step for a creditor to complete if wanting to make an application to the Court for a person to be made bankrupt. If payment of the debt does not occur within the time frame detailed in the Bankruptcy Notice, the creditor is then able to apply to the Court for the person to be made bankrupt.

The creditor must have a judgement debt to be eligible to apply for a Bankruptcy Notice.

Bankruptcy Notices are issued by the Australian Financial Security Authority.

Bankruptcy Notice Extended Answer:

Bankruptcy Notice, what it means for you.

Firstly, the purpose of a Bankruptcy Notice is to protect your legal rights.

There are two ways you can become bankrupt:

  1. You can initiate bankruptcy yourself; or
  2. Somebody you owe money can ask the Court to declare you bankrupt.

A Bankruptcy Notice pertains solely to when somebody you owe money to is going to ask the Court for the Court to issue an Order making you bankrupt. To protect you from being caught unaware, the legislation requires that your creditor cannot commence a Court application without first issuing a Bankruptcy Notice to you.

The purpose of a Bankruptcy Notice is to;

  1. make you aware that the person you owe money to (the creditor) is intending to make an application to the Court for a Court Order to make you bankrupt, and
  2. give you time to get legal advice on your rights and what actions you can take to respond to the creditor’s proposed application to the Court.

When can a creditor apply for a Bankruptcy Notice?

To issue a Bankruptcy Notice the creditor must have gone to court and obtained a judgement debt against you within the last 6 years. When the creditor has a valid judgement debt, the creditor is able to apply online to the Australian Financial Security Authority for a Bankruptcy Notice to be issued. For this to happen the creditor must pay the Australian Financial Security Authority $470, the debt must be a judgement debt, exceed $5,000, and be no more than 6 years old.

You have 21 days from the date you receive the Bankruptcy Notice before your creditor can commence their Court application.

QUICK TIP: From 25 March 2020 to address covid-19 the Federal Government temporarily changed the legislation for 6 months whereby a Bankruptcy Notice cannot be issued unless the debt is greater than $20,000 and when a Bankruptcy Notice is issued, the moratorium period is extended from 21 days to 6 months.

How do you receive a Bankruptcy Notice?

A bankruptcy notice will give you a 21-day moratorium period (6 months during covid-19 moratorium period) before the creditor can proceed to make an application to the Court for you to be made bankrupt. The 21 days start from the date you receive the Bankruptcy Notice. The creditor can issue the Bankruptcy Notice to you by physically handing it to you or by sending it to you by post, fax, courier, or email.

If you dispute the debt you should seek urgent legal advice. If the debt is valid but you are unable to pay the debt or come to an agreement with the creditor for payment of the debt by the deadline, the creditor is able to make an application with the Court for a Court Order making you bankrupt.

If you are already bankrupt or a party to a debt agreement or personal insolvency agreement, a Bankruptcy Notice cannot be issued for a debt subject to the same.

If you live overseas the creditor can apply for a Bankruptcy Notice against you. If the debt was incurred overseas, the only additional step for the creditor is to convert the debt to Australian dollars when applying for Bankruptcy Notice.

QUICK TIP: It is important that you maintain communications with your creditors and open your mail and emails to ensure that if a creditor issues a Bankruptcy Notice, you are aware and can take steps to protect your legal rights. Also, if the creditor is unable to find you, the creditor can apply to the Court for substituted service of the Bankruptcy Notice. For example, to one of your family members who they have an address for. If you do not maintain contact with your creditors it is possible for you to be made bankrupt without receiving any notice of the proceedings.

Does a Bankruptcy Notice appear on the National Personal Insolvency Index (NPII)?

No, a Bankruptcy Notice does not appear on the NPII.

For how long does a Bankruptcy Notice last?

Once the Bankruptcy Notice is issued, the creditor has 6 months to serve it to you. If this does not happen, the creditor has to apply for an extension and pay an additional fee.

What should I do if I receive a Bankruptcy Notice? 

We highly recommend that you speak to one of our advisors if you receive a Bankruptcy Notice. The sooner you speak to us the better. We will discuss your situation and give you our recommendations. This is an opportunity for you to get help with your financial affairs and plot your next steps to relieving the financial stress. We do not charge for this service.

By being proactive, if you need to become bankrupt, you will be able to choose a Trustee that you are comfortable with. If you do nothing and the creditor applies to the Court for you to be made bankrupt, you will then be put in a more difficult situation. The creditor’s Court application will be shown on the NPII and if you pay that creditor before the Court hearing, another creditor can continue that creditor’s proceedings before the Court. Your options are significantly reduced.

QUICK TIP: If you receive a Bankruptcy Notice it is important that you act on it straight away. Time is a big asset to help you protect your rights and maximise options available to you.


We trust this has been of assistance. We are here to help you. If you have any questions please give us a call on 1300 764 197 or email:

Further Reading:

For information on bankruptcy and how it works, we recommend our article: What is Bankruptcy? How Does it Work?

We are here to help. If you have any questions please give us a call on 1300 794 492 or email

Further Reading: We recommend our article Types of Debt Covered by Bankruptcy .

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