Bankruptcy proceedings are going to be initiated against me. I am very stressed about the whole situation but my friend has told me that I may be given an opportunity to lodge a DOI before I can be declared as bankrupt. I am not sure what this is.
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Answer by Kelly Angus, Adelaide 5000 SA
- A declaration of intention (DOI) provides temporary relief from unsecured creditors who during this period are unable to take any action to recover debts. The temporary relief is usually only 21 days. This stay period does not apply to all creditors and therefore some creditors can continue recovery action despite the stay.
- During the stay period you may:
- evaluate your financial position;
- commence or continue negotiations with your creditors; and
- make arrangements with your creditors to circumvent the need to enter a formal arrangement.
- Upon lodging a DOI your creditors receive notification of the stay as well as a copy of your financial affairs.
- You will not automatically become bankrupt after the 21-day stay period but if you fail to make an arrangement with your creditors and do not voluntarily apply for bankruptcy court proceedings may be issued by your creditors.