Many Australian’s have only seriously contemplated bankruptcy when playing a game of Monopoly with their friends! Despite this, there are around 13,000 people that declare bankruptcy each year in Australia. It’s astonishing how rapidly individuals can go from experiencing a balanced financial position to grappling a mountain of debt. Usually, circumstances such as loss of income, divorce, or unforeseen medical costs will cause serious financial complications within just a few months. Instead of wrestling with these debts for several years and ignoring the elephant in the room, it’s much better to cut your losses and seek financial help immediately.
Recently, the Australian Government proposed changes to bankruptcy laws that reduce the bankruptcy period from three years to 1 year. If this bill is passed, it will have a dramatic impact on the stigma related to bankruptcy and the financial consequences that bankrupts will experience in the future. Although many individuals understand the principle of bankruptcy, many people wouldn’t know where to start if they decided that declaring bankruptcy is the best solution for them. To give some insight, here are the top 5 tips on how to file for bankruptcy in Australia.
- Seek guidance from a registered bankruptcy trustee
If you’ve decided that bankruptcy is the best approach for you, always talk with a registered bankruptcy trustee prior to making any concrete decisions. There is a massive difference between a firm that charges you to declare bankruptcy and a legally registered bankruptcy trustee firm. In most cases, bankruptcy firms are not the same as registered bankruptcy trustee firms, so make sure 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 full recovery after you have been discharged.
- Download the forms needed to file for bankruptcy
If you’ve decided that bankruptcy is the best alternative for your individual position, there are two sets of documents that you will need to complete for you 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 (click here to download: https://www.afsa.gov.au/insolvency/how-we-can-help/forms-list/statement-affairs).
- Collect your supporting documents.
In nearly all bankruptcy cases, individuals have to provide evidence that their claims are accurate by supplying numerous supporting documents. Typically, this will include the following:.
- Income statements and personal tax returns
- Company tax returns (if you are a company 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 paramount to note that failing to deliver accurate information or any attempt to conceal information that would otherwise be relevant to your bankruptcy proceedings is a serious offence that is punishable in a criminal court.
- Complete the bankruptcy paperwork.
You must address each and every question in your bankruptcy paperwork accurately and honestly to ensure it gets processed properly. It is paramount that you include the address information of all your lenders in the secured and unsecured sections of the bankruptcy paperwork. In the Debtor’s Petition, you’ll need to present at the very least two types of ID. If you’re uncertain of which forms of ID are accepted, check the AFSA website (https://www.afsa.gov.au). If you run out of space when answering any questions, simply print out another copy of the same page and use it to fill out extra details. Furthermore, be careful to include all assets sold in the last 5 years in question 33.
- Submit your bankruptcy paperwork.
Before you lodge your bankruptcy paperwork, check the date to make sure you are submitting it within 28 days of you signing it. At Bankruptcy Experts Taree, we understand that all the paperwork can be a bit frustrating, so if you have any inquiries regarding your any of your answers, it’s best to give us a call on 1300 795 575 to ensure you get it right the first time. Alternatively, visit our website for more information: www.bankruptcyexpertstaree.com.au.