The majority of Australian’s have only honestly thought about bankruptcy when playing a game of Monopoly with their friends!
Despite this, there are close to 13,000 individuals that file for bankruptcy every year in Australia. It’s uncanny how rapidly people can go from enjoying a healthy financial position to dealing with a mountain of debt.
In many cases, events such as loss of work, divorce, or unexpected medical expenditures will spark serious financial complications within just a couple of months.
As opposed to wrestling with these debts for many years and ignoring the elephant in the room, it’s much better to cut your losses and seek financial assistance immediately.
A short time ago, the Australian Government proposed changes to bankruptcy laws that lower the bankruptcy duration from three years to 1 year.
If this bill is passed, it will have a remarkable impact on the stigma linked to bankruptcy and the financial repercussions that bankrupts will encounter down the road.
Although lots of individuals understand the principle of bankruptcy, lots of people wouldn’t know where to start if they determined that filing for bankruptcy is the best alternative for them. To provide some insight, here are the top 5 tips on how to declare bankruptcy in Australia.
Get advice from a registered bankruptcy trustee
If you’ve decided that bankruptcy is the best approach for you, always seek guidance from a registered bankruptcy trustee before making any concrete decisions. There is a significant difference between a firm that charges you to file for bankruptcy and a legally registered bankruptcy trustee firm. Most of the time, bankruptcy firms are not the same as registered bankruptcy trustee firms, so ensure you get the right advice the first time so you can make the best financial decision. The right advice will not only assist you with your decision-making, but also put you in the best position to make a complete recovery after you have been discharged.
Download the forms required to file for bankruptcy
If you’ve made the decision that bankruptcy is the best solution for your individual position, there are two sets of documents that you will need to complete if you want to declare bankruptcy:
- The Debtor’s Petition, which is a 3 page document (click here to download: https://www.afsa.gov.au/insolvency/how-we-can-help/forms-list/debtors-petition).
- The Statement of Affairs, which is a 25 page document (click on this link to download: https://www.afsa.gov.au/insolvency/how-we-can-help/forms-list/statement-affairs).
Compile your supporting documents.
In nearly all bankruptcy proceedings, individuals need to present evidence that their claims are accurate by supplying an assortment of supporting documents. Generally, this will include the following:
- Income statements and personal tax returns
- Company tax returns (if you are a business owner)
- Centrelink benefits statement (if applicable)
- Formal child support notices
- Any family law orders
- Any court orders
- Wills of any deceased estate of which you are the beneficiary
- All transaction statements from transferred assets over the last 5 years
It is vital to note that failure to provide accurate information or any attempt to conceal information that would normally relate to your bankruptcy proceedings is a severe offence that is punishable in a criminal court.
Complete the bankruptcy paperwork.
You must answer every question in your bankruptcy paperwork accurately and honestly to ensure it gets processed properly. It is crucial that you include the address details of all your lenders in the secured and unsecured sections of the bankruptcy paperwork. In the Debtor’s Petition, you’ll need to provide a minimum of two types of ID. If you’re unclear of which forms of ID are accepted, check the AFSA website (https://www.afsa.gov.au). If you run out of space when addressing any questions, simply print out another copy of the same page and use it to fill out extra information. In addition, be careful to include all assets sold in the last 5 years in question 33.
Lodge your bankruptcy paperwork.
Before you submit your bankruptcy paperwork, inspect the date to make sure you are submitting it within 28 days of you signing it. At Bankruptcy Experts, we understand that all the paperwork can be a bit over-bearing, so if you have any concerns regarding your any of your answers, it’s best to contact us on 1300 795 575 to ensure you get it right the first time. Alternatively, visit our website for more information: www.bankruptcyexpertsbundaberg.com.au.