Personal Insolvency

Personal Insolvency – Bankruptcy

As bankruptcy lawyers who deal with this complex area of law regularly, we understand that this can be a very stressful time.

We work closely with our clients, their accountants and financial advisors where possible in order to achieve the best possible results in what is usually a stressful time. There are often many options available, including various types of debt arrangements where appropriate, and bankruptcy if other methods are not an option. Even you think the situation is past the point of no return, this may not be the case. The involvement of an experienced lawyer who knows the law, and therefore the options, may make all the difference.


What is a Bankruptcy Notice?

A Bankruptcy Notice is the initial part of the process in making a person bankrupt. A judgment will already have been obtained. This needs to be served personally on the person who owns the money andis usually prepared by a bankruptcy lawyer. There will be 28 days from the date of service to file an application to set aside the notice if there is a legitimate dispute about the notice. The debt will either need to be satisfied or a formal arrangement made with the creditor.

What do I do if I have been served with a Bankruptcy Notice?

If you have been served with Bankruptcy Notice, it is critical that you seek legal advice as soon as possible so that all option s available to you in your individual circumstances may be considered.

Can I make myself voluntarily bankrupt?

If you consider that are personally insolvent, there may options such as debt arrangements and negotiation but if these are not possible, bankruptcy may be your only option. You may not want someone else to send you bankrupt either and you can elect to go bankrupt voluntarily. This can be by either filing a Debtor’s Petition and a Statement of Affairs with AFSA or appointing a private bankruptcy trustee. We strongly recommend that you seek legal advice if you are considering going down this path.

What will happen if I go bankrupt?

Whether you choose to go bankrupt voluntarily or are made bankrupt by order of the court, it makes no effective difference to what happens after, other than your bankruptcy trustee will be appointed by the court and usually at the recommendation of the creditor.
Bankruptcy generally lasts for three years, although that can be extended in particular circumstances. A bankrupt person has certain restrictions, including:

  • You may have to answer detailed questions with the trustee on an ongoing basis if the trustee chooses to investigate your estate
  • You will not be able to be a director of a company for the duration of your bankruptcy
  • You will have strong credit restrictions including an obligation to disclose such to a potential creditor during your bankruptcy
  • you can operate a business but only under your personal name ie., not under a business name, unless you make full disclosure of such
  • you may have to surrender your passport and otherwise have to seek permission from your trustee during your bankruptcy in order to travel overseas.

Can I still earn an income while I am bankrupt?

Absolutely. There is no restriction on how much you earn. However, there is a threshold amount that you will able to earn and retain. This amount will be determined by your trustee according to a complex formula and takes into account any dependants you have, for example. Half of any amount over the threshold amount will be retained by you and the other half will need to be paid to the trustee for distribution to creditors. This will apply for the duration of your bankruptcy.

Trusted advice at a time when you need it most

If you’re considering entering into an insolvency agreement, make an appointment us. We can provide you with sound and appropriate legal advice.

We can assist you if you:

  • have received a letter of demand or are being pursued by a debt collector
  • are considering bankruptcy
  • have been served with a Bankruptcy Notice or Creditor’s Petition
  • require assistance with negotiating with creditors
  • need representation in bankruptcy proceedings brought against you
  • have received correspondence from your bankruptcy trustee and seek advice or representation
  • are considering annulling your bankruptcy.

Don’t wait until it is too late. Should you require representation or just solid professional advice with respect to any bankruptcy or personal insolvency please contact us.

Call us today on 1300 907 335 or alternatively fill out the contact form on this page. We are here to help.

Our Locations across Melbourne


Level 15, 440 Collins Street,
Melbourne VIC 3000


Level 8,
1341 Dandenong Rd,
Chadstone Vic 3148


Ground Flr,
435 Nepean Hwy,
Frankston Vic 3199


Level 1,
441 South Road,
Moorabbin Vic 3189


Ground Flr,
84 Hotham St,
Preston Vic 3072


Level 2,
311 Lonsdale St,
Dandenong Vic 3175


Level 5,
12 Clarke Street,
Sunshine Vic 3020