A debtor (a person who owes money to someone else) can apply to have some of their debts frozen for 21 days. However, what does this mean and how can a debtor do this?

What Does It Mean?

For the debtor to freeze certain debts, they must file a Declaration of Intention to Present a Debtor’s Petition with the Official Receiver (Declaration). Additionally, the debtor must also prepare a statement of affairs. Before accepting the Declaration, the Official Receiver provides the debtor with information about the consequences, and alternatives, of bankruptcy. Once accepted, creditors (the people who the debtor owes money to) are informed of the filing of the Declaration.

Effect of the Declaration

During the 21-day period following the filing of the Declaration:

  • unsecured creditors cannot enforce any judgments they might have against the debtor; and 
  • the sheriff cannot proceed with seizing and selling the debtor’s property.

However, it’s important to note that:

  • secured creditors can still proceed with enforcement action; 
  • any creditor can commence or continue legal proceedings, just not enforce judgments; and
  • filing a Declaration allows other creditors to commence bankruptcy proceedings against the debtor.

Importantly, the 21-day period cannot be extended. It may even finish sooner if the debtor appoints a trustee, or a creditor commences bankruptcy proceedings against the debtor. 


In summary, debtors should carefully consider the above before filing a Declaration. Debtors should seek legal advice on the effects of the Declaration, any alternatives, and the consequences of a potential bankruptcy. 

Any creditor who receives a notice that a Declaration has been filed should seek legal advice on how it effects their rights now and in any potential bankruptcy.

If any of the above applies to you, give our expert insolvency lawyers at Craddock Murray Neumann a call so that they can discuss your option with you.

The law is complex and changes frequently. The law may have changed between the time this article was written and the time you are reading it.