Most Australian’s have only really considered bankruptcy when playing a game of Monopoly with their buddies! In spite of this, there are an estimated 13,000 individuals that file for bankruptcy every year in Australia. It’s incredible how easily people can go from enjoying a healthy financial position to tackling a mountain of debt. Most of the time, unfortunate events such as loss of employment, divorce, or unanticipated medical expenses will spark serious financial complications within just a couple of months. Instead of 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.
A short time ago, the Australian Government proposed changes to bankruptcy laws that decrease the bankruptcy time frame from three years to 1 year. If this proposed act is passed, it will have a powerful effect on the stigma linked with bankruptcy and the financial repercussions that bankrupts will face down the road. While many people understand the idea of bankruptcy, most people wouldn’t know where to start if they decided that filing for bankruptcy is the best alternative for them. To give some insight, here are the top 5 tips on how to declare bankruptcy in Australia.
- Seek guidance from a registered bankruptcy trustee
If you’ve decided that bankruptcy is the best choice for you, always speak to a registered bankruptcy trustee prior to making any concrete decisions. There is a considerable difference between a firm that charges you to file for bankruptcy and a legitimately registered bankruptcy trustee firm. In most cases, 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 needed to file for bankruptcy
If you’ve decided that bankruptcy is the best option for your individual scenario, 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).
- Gather your supporting documents
In almost all bankruptcy cases, individuals need to offer evidence that their claims are accurate by supplying a variety 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 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 imperative to note that failing to supply accurate information or any attempt to hide 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 answer every question in your bankruptcy paperwork accurately and honestly to make sure it gets processed successfully. It is imperative 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 supply at least 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 answering any questions, simply print out another copy of that page and use it to fill out further information. Additionally, be careful to include all assets sold in the last 5 years in question 33.
- Submit your bankruptcy paperwork.
Before you submit your bankruptcy paperwork, check the date to ensure you are submitting it within 28 days of you signing it. At Bankruptcy Experts Wangaratta, we understand that all the paperwork can be a bit over-bearing, so if you have any inquiries 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 further information: www.bankruptcyexpertswangaratta.com.au.