Bankruptcy Court

What is a bankruptcy court?

A court of Bankruptcy is a court which hears applications by creditors for to bankrupt a particular individual or for a debtor to file a debtors petition.

Which courts normally hear bankruptcy applications?

In Australia, most bankruptcy applications are made in front of the Federal Magistrates court. This is the ‘McDonalds’ of the federal court system and is soon to be subsumed into the general Federal Court of Australia which will subsequently hear all of the applications which the Federal Magistrates Court currently hears including creditor’s petitions, and debtor petitions. The Federak Magistrates Court is designed to be a cheap, quick and efficient forum for dealing with the routine applications which are heard in the Australian Federal Court system. If it is a particularly complex application which is appealed, the next port of call is the Federal Court of Australia and then if there is an appeal beyond thism the only avenue is the High Court of Australia although an appeal to this level would be very unusual and only for a very particular question of law because of the legal costs invovled in a matter like this.

What documents do you need to file?

If you are seeking to have someone made bankrupt you need to file creditor’s petition which will allow you to the obtain a sequestration order against the person that owes you money. A sequestration order is where the debtor’s financial affairs become subject to the control of a Bankrutpcy Trustee. If you are seeking to declare voluntary bankruptcy, you need to file what is called a debtor’s petition which is a declaration that you cannot reach an arrangement with your creditors and that the you can no longer pay you bills as and when they fall due and payable.

What other government departments do I need to contact?

You should contact the Insolvency Trustee Service of Australia (“ITSA”) for more information about what Bankruptcy means and how it is administered. ITSA is the key governement body for dealing with the process of bankruptcy. All of the processes of the registration of Bankruptcy comes through ITSA. You can obtain the key documents required for administering a bankruptcy application from them if necessary.

What should I do no next?

If you are involved in a bankruptcy case in court, you should seek legal advice immediately to protect your interests as they can be greatly compromised by not having appropriate advice available to you. You can click below to obtain the correct legal advice in relation to Bankrutpcy matters.

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