Offsetting claim – Set aside a statutory demand - Part 2

Under Australia's bankruptcy system, there is no limit on how much income a bankrupt person can earn, though they may be required to make compulsory contributions if their after-tax income exceeds statutory thresholds. This article examines how income contribution calculations work, what thresholds apply based on the number of dependants, and why the system balances creditor interests with maintaining a reasonable standard of living for bankrupt individuals.

An undischarged bankrupt faces strict legal obligations including cooperating with trustees, disclosing all property and financial changes, and obtaining consent before international travel. What are the criminal penalties for breaching these restrictions, and how can early disclosure and proper legal advice help navigate trustee negotiations more effectively than denial or delay?

Trust structures can protect assets held for others, but they do not shield a bankrupt person's own entitlements, trustee indemnity rights, or transfers made to defeat creditors. The deed, financial records and transaction history determine whether trust property remains outside the bankruptcy estate or becomes available to creditors through beneficial interests, indemnity claims, or voidable transaction recovery.

Voluntary Administration under Part 5.3A of the Corporations Act 2001 offers Australian companies a formal insolvency process where an independent liquidator investigates whether the business can be preserved. During this process, most unsecured claims are stayed while creditors, employees, and secured parties navigate distinct rights and exceptions. Understanding the strategic timing for directors, the decision-making power of creditors, and the specific protections available to employees proves critical t

Bankruptcy trustees can challenge pre-bankruptcy transactions under sections 120, 121, and 122 of the Bankruptcy Act 1966, targeting undervalued transfers, creditor-defeating arrangements, and preferential payments. Understanding the statutory tests, timing rules, and evidentiary requirements is essential for recipients facing clawback demands, as market value alone does not guarantee protection and poor documentation can prove decisive.

When a creditor seeks to make an individual bankrupt through a sequestration order, the process involves strict statutory requirements including judgment thresholds, bankruptcy notices, and court scrutiny. Understanding the procedural steps, potential defects, and strategic alternatives is essential for both creditors pursuing debt recovery and debtors facing insolvency proceedings.

A statutory demand is one of the fastest and most powerful tools for recovering undisputed debts from Australian companies, engaging insolvency provisions that give debtors just 21 days to respond. While it creates significant commercial pressure that often leads to payment or negotiated resolution, it must be used carefully for genuinely undisputed debts to avoid being set aside and incurring adverse costs.

The decision casts doubt on what was a relatively settled position: a third-party payment could be a preference payment.

Small business restructuring under Part 5.3B of the Corporations Act 2001 offers eligible insolvent companies with liabilities under $1 million a streamlined path to propose creditor compromises...

Much of the discussion around AI has focused on the opportunities it creates. Increased productivity, reduced costs, better customer experiences and faster decision-making are all compelling reasons for businesses to embrace the technology.