Lately, I have been lending someone from Australia money online. It has been going on for more than a year, and Alex (the person I lent money to) pays me back from time to time.

However, he failed to pay back everything he borrowed every month, so the money he owed me increased. Just two months ago, he told me that he filed for bankruptcy in March (he owed me $400 when the bankruptcy was filed), but he said he was committed to paying me back in full.

However, a week ago, he said he couldn't afford to pay me back that much, so he included me in his bankruptcy filings.

Since March, he borrowed and repaid from time to time, and a week ago, if disregarding his bankruptcy filings, he would owe me $650. Let's say from March to a week ago (before he told me about his intention of putting his debt with me in his bankruptcy filing), he borrowed $600 and paid back $350 in total.

Can he legally get away with $400 and only owe me $250? The $350 he paid back from March until a week ago should be applied to the $400 he owed because that debt is older, and he never told me about putting his debt in his bankruptcy filings. As a result, he should only be able to get away with $50 since that is what's left of the $400 debt.

Please let me know if you have thoughts on my situation or if you can provide any help. I appreciate your time in reading my question.

  • 1
    You gave money to a person you already knew was in bankruptcy and you're asking if you can get it back? Get a lawyer, get in line, and maybe you'll get something from the bankruptcy liquidation. Most likely it will not be all you're owed.
    – littleadv
    Aug 8, 2023 at 15:36

1 Answer 1


As mentioned in the comment - you should talk to an Australian lawyer about your rights in this situation.

Generally, from my layman understanding of bankruptcy laws (which are fairly similar in most cases):

  1. The debtor cannot pick and choose who to "include" in bankruptcy proceedings, they're required to list all of their assets and all of their obligations.

  2. If you know someone is filing for bankruptcy, you may have a legal obligation to step forward and file a claim to preserve your rights. In some cases, as part of the bankruptcy process, anyone who didn't file a timely claim will be denied any payment at all.

  3. If you know someone is filing for bankruptcy you have to be very careful about adding more debt. In some cases, that debt may be excluded from bankruptcy proceedings and you'll end up with nothing.

  4. As part of the bankruptcy process, the debtor may not be paying anything back to anyone until the proper resolution is met. That's what is called "bankruptcy protection". Debtors are usually not allowed to prefer one lender over the other, so they cannot for example pay you, but not pay their credit card or other debts.

To check the actual legal rights and requirements for an Australian bankruptcy proceedings you have to talk to an Australian bankruptcy attorney specialist. Bottom line: you're unlikely to get anything back. How much, if anything, you'll be getting back will be determined by the bankruptcy court/trustee.

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