Most Australian’s have only honestly thought about bankruptcy when playing a game of Monopoly with their mates! In spite of this, there are roughly 13,000 individuals that file for bankruptcy each year in Australia. It’s astonishing how quickly individuals can go from experiencing a healthy financial position to tackling a mountain of debt. Generally, unfortunate events like loss of employment, divorce, or sudden medical expenses will trigger serious financial issues within just a few 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 guidance as quickly as possible.
Not long ago, the Australian Government proposed changes to bankruptcy laws that lower the bankruptcy time frame from 3 years to 1 year. If this proposal is passed, it will have a remarkable effect on the stigma related to bankruptcy and the financial implications that bankrupts will experience down the road. While lots of people understand the concept of bankruptcy, lots of individuals wouldn’t know where to start if they determined that filing for bankruptcy is the best solution for them. To provide some insight, here are the top 5 tips on how to declare bankruptcy in Australia.
- Seek advice from a registered bankruptcy trustee
If you’ve determined that bankruptcy is the best approach for you, always consult with 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. 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 aid 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 declare bankruptcy
If you’ve made the decision that bankruptcy is the best alternative for your individual circumstances, there are two sets of documents that you will need to complete for you 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 (visit this site to download: https://www.afsa.gov.au/insolvency/how-we-can-help/forms-list/statement-affairs).
- Collect your supporting documents.
In almost all bankruptcy cases, individuals have to present evidence that their claims are accurate by supplying various supporting documents. Normally, 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 integral to note that failure to provide accurate information or any attempt to hide information that would normally 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 truthfully to ensure it gets processed correctly. 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 a minimum of two types of ID. If you’re unclear of which forms of ID are acceptable, 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 additional information. In addition, 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, inspect the date to ensure you are lodging it within 28 days of you signing it. At Bankruptcy Experts Parramatta, we understand that all the paperwork can be a bit complicated, so if you have any inquiries regarding your any of your answers, it’s best to phone us on 1300 795 575 to ensure you get it right the first time. Alternatively, visit our website for more information: www.bankruptcyexpertsparramatta.com.au.