Many Australian’s have only really contemplated bankruptcy when playing a game of Monopoly with their buddies! Despite this, there are nearly 13,000 people that file for bankruptcy yearly in Australia. It’s incredible how quickly individuals can go from experiencing a healthy financial position to tackling a mountain of debt. In many cases, unfortunate events like loss of income, divorce, or unexpected medical expenses will spark serious financial issues within just a few months. Rather than wrestling with these debts for several years and ignoring the elephant in the room, it’s far better to cut your losses and seek financial help as quickly as possible.
A short time ago, the Australian Government proposed changes to bankruptcy laws that lower the bankruptcy period from three years to 1 year. If this bill is passed, it will have a powerful impact on the stigma linked with bankruptcy and the financial implications that bankrupts will experience down the road. While most people understand the notion of bankruptcy, lots of folks wouldn’t know where to start if they decided that filing for bankruptcy is the best solution for them. To offer 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 solution for you, always speak to a registered bankruptcy trustee before making any concrete decisions. There is a significant 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 ensure 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 declare bankruptcy
If you’ve decided that bankruptcy is the best choice for your individual circumstances, 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 (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).
- Gather your supporting documents.
In nearly all bankruptcy proceedings, individuals must 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 business 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 paramount to note that failure to provide accurate information or any attempt to hide information that would normally relate to your bankruptcy proceedings is a serious offence that is punishable in a criminal court.
- Complete the bankruptcy paperwork.
You must answer each question in your bankruptcy paperwork accurately and truthfully to make sure it gets processed properly. It is crucial 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 provide a minimum of 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 don’t have enough space when addressing any questions, simply print out another copy of the same 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, inspect the date to ensure you are lodging it within 28 days of you signing it. At Bankruptcy Experts Toowoomba, we understand that all the paperwork can be a bit difficult, so if you have any inquiries regarding your any of your answers, it’s best to give us a ring on 1300 795 575 to ensure you get it right the first time. Alternatively, visit our website for additional information: Bankruptcy Experts Toowoomba