Top 5 Tips on How to Declare Bankruptcy in Australia
Most Australian’s have only really considered bankruptcy when playing a game of Monopoly with their buddies! Despite this, there are an estimated 13,000 people that file for bankruptcy every year in Australia. It’s astonishing how easily people can go from experiencing a healthy financial position to facing a mountain of debt. In many cases, circumstances like loss of work, divorce, or unplanned medical expenses will cause serious financial problems within just a few months. Rather than wrestling with these debts for years and ignoring the elephant in the room, it’s far better to cut your losses and seek financial support as soon as possible.
Not long ago, the Australian Government proposed changes to bankruptcy laws that cut down the bankruptcy time frame from three years to 1 year. If this bill is passed, it will have a dramatic impact on the stigma connected with bankruptcy and the financial penalties that bankrupts will encounter in the future. Although lots of people understand the concept of bankruptcy, lots of individuals wouldn’t know where to start if they determined that declaring bankruptcy is the best option for them. To provide some insight, here are the top 5 tips on how to file for bankruptcy in Australia.
1.Seek advice from a registered bankruptcy trustee
If you’ve decided that bankruptcy is the best approach for you, always speak to a registered bankruptcy trustee before making any concrete decisions. There is a vast difference between a firm that charges you to file for 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 assist you with your decision-making, but also put you in the best position to make a full recovery after you have been discharged.
2. Download the forms required to file for bankruptcy
If you’ve made the decision that bankruptcy is the best alternative for your individual position, there are two sets of documents that you will need to complete if you want to file for bankruptcy:
- The Debtor’s Petition, which is a 3 page document (visit this site 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).
3. Compile your supporting documents
In almost all bankruptcy proceedings, individuals must present evidence that their claims are accurate by supplying an assortment of supporting documents. Normally, this will include the following:.
- Income statements and personal tax returns
- Company tax returns (if you are a business owner)
- Centrelink benefits statement (if appropriate)
- 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 imperative to note that failing to supply accurate information or any attempt to hide information that would otherwise relate to your bankruptcy case is a severe offence that is punishable in a criminal court.
4. Complete the bankruptcy paperwork.
You must address each question in your bankruptcy paperwork accurately and truthfully to make sure it gets processed effectively. It is imperative that you include the address information 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 least two types of ID. If you’re unsure of which forms of ID are accepted, check the AFSA website (https://www.afsa.gov.au). If you run out of space when responding to any questions, simply print out another copy of the same page and use it to fill out additional details. Also, be careful to include all assets sold in the last 5 years in question 33.
5. Submit your bankruptcy paperwork.
Before you submit your bankruptcy paperwork, check the date to ensure you are lodging it within 28 days of you signing it. At Bankruptcy Experts Australia, we understand that all the paperwork can be a bit over-bearing, so if you have any questions 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 additional information: Declaring Bankruptcy Australia