- 1A bankruptcy notice is issued by the Official Receiver on a creditor's application, based on a final judgment or order.
- 2You generally have 21 days from service to pay, reach an agreement or apply to have the notice set aside.
- 3Failing to comply is an act of bankruptcy that allows the creditor to petition the court to make you bankrupt.
What a bankruptcy notice is
A bankruptcy notice is a formal demand for payment of a debt, issued by the Official Receiver at the Australian Financial Security Authority (AFSA) at a creditor's request. The creditor must hold a final judgment or order for at least the statutory minimum amount.
The notice is not a finding that you are bankrupt. It is a warning step: it gives you a set period to deal with the debt before the creditor can take the next step.
The 21-day deadline
You generally have 21 days from the date you are served to comply with the notice. If you do not pay the debt, reach an agreement the creditor accepts, or obtain an order extending the time or setting the notice aside, you commit what the Bankruptcy Act 1966 (Cth) calls an "act of bankruptcy".
The creditor then has a limited period in which it may file a creditor's petition asking the court to make you bankrupt. Acting well within the 21 days keeps your options open.
Your options
- ✓Pay the debt in full, including any costs claimed.
- ✓Negotiate a payment arrangement that the creditor agrees to in writing.
- ✓Apply to the court to set aside the notice, if there is a proper basis — for example a genuine counter-claim or a defect in the notice.
- ✓Consider a formal alternative to bankruptcy, such as a debt agreement or personal insolvency agreement, if you cannot pay your debts generally.
- ✓In some cases, if bankruptcy is unavoidable, consider whether voluntary bankruptcy is the better path.
How we help
We review the notice and the underlying judgment, check whether there are grounds to challenge it, and speak with the creditor about a realistic resolution. If a court application is needed, it must be filed within the time limit — so early contact matters.
For creditors, we prepare and serve bankruptcy notices and, where they are not complied with, run the creditor's petition.
Common questions
Can I ignore a bankruptcy notice if I dispute the debt?+
No. Disputes about the underlying debt generally had to be raised before judgment. Ignoring the notice can lead to bankruptcy proceedings. Get advice immediately about whether there are grounds to set it aside.
Will a payment plan stop the process?+
Only if the creditor agrees. Any arrangement should be documented in writing, and you should confirm what happens to the notice and time limits.
Sources & further reading
- ↗Australian Financial Security Authority (AFSA) — bankruptcy notices and your options
- ↗Federal Register of Legislation — Bankruptcy Act 1966 (Cth)
- ↗Federal Circuit and Family Court of Australia — applications to set aside a bankruptcy notice
This guide is general information about Queensland and Australian law and is not legal advice. Laws change and every situation is different — speak with us about your specific circumstances before acting.
