Many Australian’s have only really considered bankruptcy when playing a game of Monopoly with their mates! Despite this, there are around 13,000 individuals that file for bankruptcy every year in Australia. It’s astonishing how quickly people can go from experiencing a healthy financial position to tackling a mountain of debt. In most cases, unfortunate events like loss of work, divorce, or unanticipated medical expenditures will lead to serious financial problems 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 far better to cut your losses and seek financial assistance immediately.
In recent months, 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 dramatic effect on the stigma linked with bankruptcy and the financial repercussions that bankrupts will experience down the road. Even though many people understand the principle of bankruptcy, most individuals wouldn’t know where to start if they decided that declaring bankruptcy is the best alternative for them. To offer some insight, here are the top 5 tips on how to declare bankruptcy in Australia.
- Get guidance from a registered bankruptcy trustee
If you’ve made up your mind that bankruptcy is the best solution for you, always consult with a registered bankruptcy trustee before making any concrete decisions. There is a tremendous difference between a firm that charges you to declare bankruptcy and a legally registered bankruptcy trustee firm. In many cases, bankruptcy firms are not the same as registered bankruptcy trustee firms, so be sure you get the right advice the first time so you can make the best financial decision. The right advice will not only help you with your decision-making, but also put you in the best position to make a full 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 choice for your individual position, there are two sets of documents that you will need to complete in order to file for bankruptcy:
- The Debtor’s Petition, which is a 3 page document (click on this link 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 (visit this site to download: https://www.afsa.gov.au/insolvency/how-we-can-help/forms-list/statement-affairs).
- Collect 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. Commonly, this will include the following:
- Income statements and personal tax returns
- Company tax returns (if you are a company owner)
- Centrelink benefits statement (if relevant)
- 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 failing to supply accurate information or any attempt to hide information that would otherwise be relevant to your bankruptcy case is a severe offence that is punishable in a criminal court.
- Complete the bankruptcy paperwork.
You must reply to every question in your bankruptcy paperwork accurately and truthfully to ensure it gets processed effectively. It is crucial that you include the address details of all your creditors in the secured and unsecured sections of the bankruptcy paperwork. In the Debtor’s Petition, you’ll need to supply at the very least two types of ID. If you’re not sure of which forms of ID are acceptable, check the AFSA website (https://www.afsa.gov.au). If you don’t have enough space when responding to any questions, simply print out another copy of the same page and use it to fill out additional details. Moreover, be careful to include all assets sold in the last 5 years in question 33.
- Lodge your bankruptcy paperwork.
Before you lodge your bankruptcy paperwork, check the date to ensure you are submitting it within 28 days of you signing it. At Bankruptcy Experts Gosford, we understand that all the paperwork can be a bit overwhelming, so if you have any concerns regarding your any of your answers, it’s best to call us on 1300 795 575 to ensure you get it right the first time. Alternatively, visit our website for additional information: www.bankruptcyexpertsgosford.com.au.