In explaining the consequences of bankruptcy for an individual, Keay’s Insolvency, 11th ed, [4.15] refers to the positive outcome for debtors of “the relief from responsibility for their provable debts and from the claims and pursuit by creditors”, and that this is the case
“whether the debts be $20,000 or $20 million …”.
This upper amount might need revision in the next edition, following the bankruptcy of Mr Jon Angelo George Adgemis, whose debts are said to total $1.8b. He owes Commonwealth tax-related liabilities of over $162 million.
A sequestration order was made against his estate by the Federal Court on 3 October 2025, the Court directing the Official Receiver to reject the debtor’s petition, made by Adgemis, the day before. The date of the act of bankruptcy (not the date of the bankruptcy) is 18 November 2024:[1] Deputy Commissioner of Taxation, in the matter of Adgemis [2025] FCA 1218.
The reality is that there is no limit to the amount of debts that may be discharged by bankruptcy, although it is very unusual to have a bankrupt with debts of that amount. Around half of those entering personal insolvency have debts of less than $50,000, compared to the average Australian household debt of more than $260,000. Personal insolvencies largely comprise renters with unsecured debts and a low savings or asset base.[2]
Bankruptcy strictly has no lower limit either, in voluntary bankruptcy, but section 55(3AA) allows the Official Receiver to reject a debtor’s petition where it is an abuse of the bankruptcy system such as, in the past, debtors going bankrupt over unpaid electricity bills.
While non-payment of debt does not result in the severe consequences of Roman times, it does retain a stigma, based in religion and morality, which crystallises on the public declaration of inability to pay that bankruptcy signifies.
In an old case, one Judge was prompted to say that
“there is something which, if not shocking, is at least something which takes one aback about a suggestion that somebody who owes almost 5.5 million dollars can offer $15,000 [0.27c/$] and walk away without there being any appropriate investigation of his affairs”.[3]
That was in the context of a Part X proposal where the then pre-2004 law did not allow, for example, public examinations.
In contrast to that 0.0027c in the dollar, Mr Adgemis had offered less – 0.16c/$, that is, $3 million for $1.8 billion under a Part X agreement,[4] to try to stave off bankruptcy. The law will accept ‘derisory dividends’ from such an agreement, if informed creditors so agree. This was never going to be such a case.
Bankruptcies usually produce nothing for creditors, with the average dividend around 2c/$. His bankruptcy may produce something more following what will be extensive and expensive investigations.
The shocking issue in the case of Mt Adgemis is not so much that he has gone bankrupt for $1.8b, or what can be retrieved, but how an individual could accumulate such liabilities and in particular tax liabilities in that amount.
In any event, he will be released from those debts and can start again with the benefit of the ‘fresh start’ that bankruptcy provides.
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[1] Cf Sequestration of Jon Angelo George Adgemis’s estate | Australian Financial Security Authority
[2] AFSA Chief Executive address at the 2025 AFIA webinar | Australian Financial Security Authority
[3] Cited in Re Roger Lonsdale Lancaster v NZI Capital Corporation Limited and the Official Trustee in Bankruptcy [1991] FCA 471.
[4] See judgment.
