Bankruptcy is the process in which individuals or sole traders who cannot pay their debts to creditors can seek relief of their debt through the legal system.
There are two ways in which a debtor can be declared bankrupt. Either by presenting their own petition (known as a Debtor’s Petition) or on by application to the court by a creditor who is owed money.
If you declare yourself a bankrupt, you have to complete and lodge a Debtor’s Petition along with a Statement of Affairs (an SOA) with the Australian Financial Security Authority (AFSA).
A debtor may also be declared bankrupt after a creditor (or creditors) makes an application to Court seeking an order for the debtor’s bankruptcy. Such an order is known as a Sequestration Order.
Bankruptcy is a serious issue and cannot be cancelled simply because you change your mind. The team at Brooke Bird will help you understand all of your options and help you to make an informed decision.
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