Insolvency | By Lawyers
Subscribe Skip to main content

Insolvency

FED

This publication guides practitioners advising businesses and individuals in debt.

2 Matter Plans

Overview

The commentaries assist practitioners with representing individual and company clients, including insolvency alternatives, debt respite schemes, individual and company voluntary arrangements, bankruptcy, administration, receivership liquidation, and winding up.

The Reference materials folder includes guidance on electronic signing and witnessing, and the comprehensive Getting the matter underway folder includes compliance and client care documents. Using the extensive Retainer Instructions when gathering information ensures nothing is missed.

Precedents in this publication include:

  • Initial letter to debtor client with explanation of bankruptcy;
  • Example content for:
    • application for winding up;
    • affidavit in support of application for winding up;
    • application to set aside a statutory demand;
    • affidavit in support of setting aside a statutory demand.
Icon

2 Matter Plans Included

  • Item icon ALERTS - Nil
  • Item icon Full Commentary - Bankruptcy of Individuals
  • Folder icon Reference materials
    • Item icon AI Prompts
      An AI prompt defines a specific task for AI to perform, like drafting a particular document, and provides clear instructions on how to execute that task. The goal is for the AI to quickly create a useful first draft of a document, which the user verifies and refines into a final version, ultimately ...

      This excerpt is a preview of the full publication. You can Subscribe Now and gain immediate access to the complete publication.

    • Item icon Looking to the Future
    • Item icon Electronic Signing and Witnessing
    • Item icon 101 Costs Answers
    • Folder icon Papers and articles - Insolvency
      • Item icon Bankruptcy and other options
      • Item icon Directors beware
      • Item icon Directors beware – Piercing the corporate veil – The ATO and DPNs
      • Item icon If the ATO doesn't get you, then the OSR might
      • Item icon Income contributions and accumulated savings in bankruptcy
      • Item icon Plain language – A paper by the Hon. Michael Kirby AC CMG
      • Item icon Practical warning signs of insolvency for small business
      • Item icon Pre-packs – Do they have a place in Australian insolvency practice?
      • Item icon Recent case law developments may have significance for directors and creditors
      • Item icon Saviours or scavengers - A review of debt advisory
      • Item icon Technical guide: Voluntary administration
      • Item icon Technical guide: Voting at meetings of creditors of insolvent companies
      • Item icon The ATO rises, and ups the ante - ATO granted new powers to pursue directors
      • Item icon Trading whilst insolvent
      • Item icon Why would anyone want to be a director
      • Item icon Winding up a corporate trustee
    • Item icon Further information
  • Item icon Overview
    Insolvency means the inability to pay all debts as and when they fall due. A person who is insolvent may go bankrupt. A company that is insolvent may go into liquidation or be wound up. The test of insolvency is a cash flow test, although a balance sheet may be relevant.

    This excerpt is a preview of the full publication. You can Subscribe Now and gain immediate access to the complete publication.

  • Folder icon A. Getting the matter underway
    • Item icon File cover sheet - Bankruptcy of individuals
    • Item icon To do list - Bankruptcy of individuals - Acting for the debtor
    • Item icon To do list - Bankruptcy of individuals - Acting for the creditor
    • Item icon First steps
    • Item icon Client details and verifying identity
    • Item icon Retainer instructions - Insolvency
    • Item icon Privacy collection notice
    • Item icon Conflict of interest check
    • Item icon Initial letter to creditor client with costs disclosure - Bankruptcy of individuals
    • Folder icon Library of costs agreements
      • Folder icon Australian Capital Territory
        • Item icon Costs agreement - ACT
        • Item icon Scope of work - Bankruptcy of individuals - Acting for the creditor
        • Item icon Scope of work - Bankruptcy of individuals - Acting for the debtor
      • Folder icon New South Wales
        • Item icon Costs agreement - NSW
        • Item icon Scope of work - Bankruptcy of individuals - Acting for the creditor
        • Item icon Scope of work - Bankruptcy of individuals - Acting for the debtor
      • Folder icon Northern Territory
        • Item icon Costs agreement - NT
        • Item icon Scope of work - Bankruptcy of individuals - Acting for the creditor
        • Item icon Scope of work - Bankruptcy of individuals - Acting for the debtor
      • Folder icon Queensland
        • Item icon Initial letter to client enclosing costs agreement
        • Item icon Costs agreement - QLD
        • Item icon Scope of work - Bankruptcy of individuals - Acting for the creditor
        • Item icon Scope of work - Bankruptcy of individuals - Acting for the debtor
        • Item icon Abbreviated costs disclosure - Costs under $3000
      • Folder icon South Australia
        • Item icon Costs agreement - SA
        • Item icon Scope of work - Bankruptcy of individuals - Acting for the creditor
        • Item icon Scope of work - Bankruptcy of individuals - Acting for the debtor
      • Folder icon Tasmania
        • Item icon Costs agreement - TAS
        • Item icon Scope of work - Bankruptcy of individuals - Acting for the creditor
        • Item icon Scope of work - Bankruptcy of individuals - Acting for the debtor
      • Folder icon Victoria
        • Item icon Costs agreement - VIC
        • Item icon Scope of work - Bankruptcy of individuals - Acting for the creditor
        • Item icon Scope of work - Bankruptcy of individuals - Acting for the debtor
      • Folder icon Western Australia
        • Item icon Costs agreement - WA
        • Item icon Scope of work - Bankruptcy of individuals - Acting for the creditor
        • Item icon Scope of work - Bankruptcy of individuals - Acting for the debtor
        • Item icon Standard costs disclosure form for clients - Fees under $3000
    • Item icon Time and costs estimates
    • Folder icon If required - Updating costs disclosure
      • Item icon Letter to client updating costs disclosure
      • Item icon Charge securing costs
      • Item icon Guarantee securing costs
      • Folder icon Costs disclosure before settlement in litigation matters
        • Item icon Letter to client - Costs disclosure before settlement - NSW, VIC, and WA
        • Item icon Letter to client - Costs disclosure before settlement - QLD, SA, TAS, ACT, and NT
    • Item icon The relevant legislation
    • Item icon A brief history and philosophy
    • Item icon Jurisdiction
      The Federal Court of Australia and the Federal Circuit and Family Court of Australia (Division 2) have concurrent jurisdiction: s 27 of the Bankruptcy Act 1966 (Cth). This is exclusive except for the jurisdiction of the High Court and the Federal Circuit and Family Court of Australia ...

      This excerpt is a preview of the full publication. You can Subscribe Now and gain immediate access to the complete publication.

    • Folder icon Debtor client
      • Item icon Initial letter to debtor client with explanation of bankruptcy options
      • Item icon Summary of the consequences of bankruptcy
      • Item icon Information sheet - Personal insolvency agreements - Part X
      • Item icon Information sheet - Debt agreements - Part IX
    • Item icon AFSA - Debtors - I can't pay my debts
    • Item icon Acts of bankruptcy
      Acts of bankruptcy are found in s 40 of the Bankruptcy Act 1966. An act of bankruptcy is evidence that a debtor is insolvent. These include filing a debtor's petition and non-compliance with a bankruptcy notice. Failures to execute a personal insolvency agreement or a breach or termination of ...

      This excerpt is a preview of the full publication. You can Subscribe Now and gain immediate access to the complete publication.

    • Item icon A bankrupt
      A bankrupt is either a person against whose estate a sequestration order has been made, known as an involuntary bankruptcy; or a person who is insolvent and has presented a debtor’s petition which is accepted by the Official Receiver, known as a voluntary bankruptcy. Most bankruptcies are voluntary.

      This excerpt is a preview of the full publication. You can Subscribe Now and gain immediate access to the complete publication.

    • Item icon Relation back, time for commencing bankruptcy proceedings and the commencement of the bankruptcy
      A creditor’s petition must be presented within 6 months of the act of bankruptcy upon which it is based and the bankruptcy commences on the day of that act of bankruptcy. This time period cannot be changed. Bankruptcy is not a debt collection procedure and before a petition is brought there ...

      This excerpt is a preview of the full publication. You can Subscribe Now and gain immediate access to the complete publication.

    • Item icon Effect of bankruptcy on the individual
      For the ordinary person with few divisible assets and an average income bankruptcy will have a limited impact. Most people would prefer to avoid the stigma and embarrassment associated with being a bankrupt; however, being freed of the often overwhelming worry of being unable to pay debts can be a ...

      This excerpt is a preview of the full publication. You can Subscribe Now and gain immediate access to the complete publication.

    • Item icon Past transactions voidable by the trustee in bankruptcy
      Transactions that may be void against the trustee are:

      This excerpt is a preview of the full publication. You can Subscribe Now and gain immediate access to the complete publication.

    • Item icon The position of third parties and secured creditors
      A transferee who acquires property in good faith at market value has no concerns. Further even if the transferee has to return the property the trustee must refund the consideration paid for the transfer: see s 120(4). The position of spouses needs to be considered. Assets in the name of the ...

      This excerpt is a preview of the full publication. You can Subscribe Now and gain immediate access to the complete publication.

    • Item icon Proceedings for recovery
      A trustee is the only party able to institute proceedings and is subject to a limitation period of 6 years from the date of bankruptcy except in the case of transfers to defeat creditors under s 121, which may be commenced at any time: s 127. It is not relevant to the proceedings that the ...

      This excerpt is a preview of the full publication. You can Subscribe Now and gain immediate access to the complete publication.

    • Item icon Family law
      The Bankruptcy Act 1966 provides that the vesting of property under the Act, including Part X agreements, is subject to an order of the Federal Circuit and Family Court of Australia in relation to property, spousal maintenance and maintenance agreements under Parts VIII or VIIIAB of the Family ...

      This excerpt is a preview of the full publication. You can Subscribe Now and gain immediate access to the complete publication.

    • Item icon Income contributions
      The Bankruptcy Act in Division 4B provides for the assessment of the income of a bankrupt and, if it exceeds the threshold, for payment of a contribution to the estate. This can be enforced by way of notice which in effect garnishees wages or a bank account. The contribution formula is designed to ...

      This excerpt is a preview of the full publication. You can Subscribe Now and gain immediate access to the complete publication.

    • Folder icon General deeds, agreements, execution clauses, and statutory declarations
      • Item icon Deeds and Agreements
      • Folder icon Deeds
        • Item icon Deed for general use
        • Item icon Deed of guarantee
        • Item icon Deed of release
        • Item icon Confidentiality deed
        • Item icon General deed of indemnity
        • Item icon Deed of assignment of agreement
        • Item icon Deed of gift
        • Folder icon Library of standard clauses for deeds
          • Item icon Amendment
          • Item icon Confidentiality for defined information - All parties
          • Item icon Confidentiality for defined information - One party
          • Item icon Confidentiality for terms of deed - All parties
          • Item icon Confidentiality for terms of deed - One party
          • Item icon Costs
          • Item icon Counterparts
          • Item icon Dispute resolution
          • Item icon Events beyond control
          • Item icon Governing law and jurisdiction
          • Item icon Interpretation
          • Item icon No assignment
          • Item icon Notices
          • Item icon Severance
          • Item icon Waiver
          • Item icon Whole agreement
      • Folder icon Agreements
        • Item icon Agreement for general use
        • Item icon Heads of agreement
        • Item icon Mediation agreement
        • Item icon Non-disclosure agreement - Formal
        • Item icon Non-disclosure agreement - Informal
        • Folder icon Library of standard clauses for agreements
          • Item icon Amendment
          • Item icon Confidentiality for defined information - All parties
          • Item icon Confidentiality for defined information - One party
          • Item icon Confidentiality for terms of agreement - All parties
          • Item icon Confidentiality for terms of agreement - One party
          • Item icon Costs
          • Item icon Counterparts
          • Item icon Dispute resolution
          • Item icon Events beyond control
          • Item icon Governing law and jurisdiction
          • Item icon Interpretation
          • Item icon No assignment
          • Item icon Notices
          • Item icon Severance
          • Item icon Waiver
          • Item icon Whole agreement
      • Folder icon Execution clauses
        • Folder icon Library of execution clauses for agreements
          • Item icon Attorney
          • Item icon Authorised officer
          • Item icon Company
          • Item icon Company - Sole director
          • Item icon Individual
          • Item icon Individual - No witness
        • Folder icon Library of execution clauses for deeds
          • Item icon Attorney
          • Item icon Authorised officer
          • Item icon Company
          • Item icon Company - Sole director
          • Item icon Individual
      • Folder icon Statutory declarations
        • Item icon Commonwealth statutory declaration
        • Item icon Statutory declaration - blank - ACT
        • Item icon Statutory declaration - blank - NSW
        • Item icon Statutory declaration - blank - VIC
        • Item icon Statutory declaration - blank - QLD
        • Item icon Statutory declaration - blank - TAS
        • Item icon Statutory declaration - blank - SA
        • Item icon Statutory declaration - blank - WA
        • Item icon Statutory declaration - blank - NT
        • Item icon Standard annexure note for documents
  • Folder icon B. Acting for the debtor
    • Item icon Voluntary bankruptcy
      Voluntary bankruptcy is bankruptcy on the debtor’s own initiative, brought about by the presentation of a debtor’s petition under s 55 of the Bankruptcy Act 1966 rather than by a sequestration order made on a creditor's petition. It is an administrative process conducted by the Official ...

      This excerpt is a preview of the full publication. You can Subscribe Now and gain immediate access to the complete publication.

    • Item icon AFSA - Debtors - I can't pay my debts
    • Folder icon Voluntary bankruptcy
      • Item icon AFSA - Bankruptcy by debtor's petition
      • Item icon AFSA - Online services
      • Item icon Letter to debtor client explaining the debtor's petition and completing the statement of affairs
      • Item icon Statement of affairs
      • Item icon Trustee consent to act declaration
    • Folder icon Involuntary bankruptcy
      • Item icon Initial letter to creditor's solicitor acting for debtor
    • Folder icon In reply to a bankruptcy notice
      • Item icon Bankruptcy notice – Australian Financial Security Authority
      • Item icon Letter to debtor client explaining options on receiving a bankruptcy notice
      • Item icon Application
      • Item icon Affidavit
      • Item icon Clause - Affidavit in support - Set aside a bankruptcy notice or extend time to comply
    • Folder icon In reply to a creditor's petition
      • Item icon Letter to debtor client explaining options on being served with a creditor's petition
      • Item icon Bankruptcy - notice of appearance
      • Item icon Notice stating grounds of opposition to application, interim application or petition
      • Item icon Application
      • Item icon Interim application
      • Item icon Affidavit
      • Item icon Clause - Affidavit in support - Notice stating grounds of opposition to creditor's petition
  • Folder icon C. Acting for the creditor
    • Item icon Involuntary bankruptcy
      Documents in new proceedings should be filed electronically with the court. If this is not possible there is the facility for filing paper documents. A creditor may file a creditor’s petition in the Federal Circuit and Family Court of Australia (Division 2) or the Federal Court for sequestration of ...

      This excerpt is a preview of the full publication. You can Subscribe Now and gain immediate access to the complete publication.

    • Item icon Minimum judgment debt to found bankruptcy notice
      The minimum debt is $10,000 and the date of the judgment must be within 6 years of the date of the bankruptcy notice: s 41.

      This excerpt is a preview of the full publication. You can Subscribe Now and gain immediate access to the complete publication.

    • Item icon Initial letter to debtor when acting for creditor
    • Item icon Bankruptcy notice
      Prior to lodging an application for a bankruptcy notice, a search of the National Personal Insolvency Index (NPII) is necessary. This search will show whether the debtor is already bankrupt or a party to a debt agreement or a personal insolvency agreement. A bankruptcy notice is a formal notice of ...

      This excerpt is a preview of the full publication. You can Subscribe Now and gain immediate access to the complete publication.

    • Item icon AFSA – Bankruptcy Register Search – Australian Financial Security Authority
    • Item icon Creditor bankruptcy notice – Australian Financial Security Authority
    • Item icon Letter to process server
    • Item icon Affidavit of service of bankruptcy notice to be sworn by process server
    • Item icon Creditor's petition
      The creditor must file the petition form within 6 months of the act of bankruptcy, which in most cases is for non-compliance with the bankruptcy notice: s 44(1)(c). Service must be effected in accordance with r 102 and personal service is preferred. Substituted service is available ...

      This excerpt is a preview of the full publication. You can Subscribe Now and gain immediate access to the complete publication.

    • Item icon Creditor's petition checklist
    • Item icon Creditor's petition
    • Item icon Affidavit verifying paragraph 4
    • Item icon Letter to process server - Petition
    • Item icon Affidavit of service of creditors petition to be sworn by process server
    • Item icon Affidavit of debt
    • Item icon Affidavit of search
    • Item icon Trustee consent to act declaration
    • Item icon Appearing in court
      A significant proportion of bankruptcy matters are case managed and determined by judicial registrars of the court, including creditors’ petitions, applications to set aside bankruptcy notices and examinations under s 81 of the Bankruptcy Act 1966. The Federal Court publishes a Guide for ...

      This excerpt is a preview of the full publication. You can Subscribe Now and gain immediate access to the complete publication.

    • Item icon Letter to creditor client reporting the making of the sequestration order
    • Item icon Letter to the trustee lodging proof of debt
    • Item icon Proof of debt – Form 8 – Australian Financial Security Authority
  • Folder icon D. Voluntary agreements for individuals that avoid bankruptcy
    • Folder icon Debt agreements
      • Item icon Debt agreements under Part IX
    • Folder icon Insolvency agreements
      • Item icon Personal insolvency agreements under Part X
      • Item icon Trustee consent to act declaration
      • Item icon Controlling trustee authority
      • Item icon Personal insolvency agreement proposal forms – Form 3 – Australian Financial Security Authority
      • Item icon Notice of completion, variation, termination or setting aside of a personal insolvency agreement (Part X), composition or scheme of arrangement (Part IV) – Form 19
  • Folder icon E. Finalising the matter
    • Item icon Letter to creditor client finalising the matter
    • Item icon Letter to client finalising the matter
    • Folder icon Example invoices incorporating notification of rights
      • Item icon Example invoice incorporating notification of client's rights - NSW
      • Item icon Example invoice incorporating notification of client's rights - VIC
      • Item icon Example invoice incorporating notification of client's rights - QLD
      • Item icon Example invoice incorporating notification of client's rights - SA
      • Item icon Example invoice incorporating notification of client's rights - TAS
      • Item icon Example invoice incorporating notification of client's rights - ACT
      • Item icon Example invoice incorporating notification of client's rights - NT
      • Item icon Example invoice incorporating notification of client's rights - WA
    • Item icon Invoice recital - Insolvency
    • Item icon Closing the file
    • Item icon File closing checklist
  • Item icon Comments and suggestions for By Lawyers

Our Authors

A team of legal professionals contribute to By Lawyers' publications, all helping to ensure that content is updated regularly to reflect changes in legislation, practice, and procedure.

Meet Our Authors
Authors