QLD Friend Served with Papers from ATO - Declared Bankrupt?

[Fact finder]

If a person is served with papers from ATO, do they declare them bankrupt or does the recipient have to do so?

 

[Lance]

Hi,

My understanding is that you can declare yourself bankrupt or a creditor owed $5,000 or more can file to have you declared bankrupt. If the ATO is a creditor that your friend owed more that $5,000 they may have applied to have your friend declared bankrupt.

It's hard to say without further details, but the best thing to do in this situation is to contact the ATO. I have to assume they have included a contact number for the relevant part of the ATO to contact with regards to the paper work your friend received.

 

[Tim W]

1. Exactly what sort of papers have you received?
   
   
2. Bankruptcy won't get you out of your tax debt.
   The ATO is almost always the first priority creditor.

 

[Fact finder]

I am not exactly certain as to "what sort of papers" as this foolish man won't show me. All I can tell you is that he has a full time job, has a partner and they have a two year old child.

The debt is around $100K as he buried his head in the sand and let it compound to get to this level of debt. He has no bank account, a poor credit rating (non too surprisingly) and a worried set of parents. It is my understanding that this debt is his only creditor and that the ATO might try to garnishee his wages.

 

[Lance]

Unfortunately it's not a lot of information. Your friend should definitely seek advice as to what to do.