The majority of Australian’s have only truly contemplated bankruptcy when playing a game of Monopoly with their buddies! Despite this, there are approximately 13,000 people that file for bankruptcy each year in Australia. It’s uncanny how rapidly individuals can go from enjoying a healthy financial position to facing a mountain of debt. In most cases, circumstances such as loss of work, divorce, or unplanned medical costs will generate serious financial problems within just a few months. In lieu 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 as soon as possible.
Not long ago, the Australian Government proposed changes to bankruptcy laws that decrease the bankruptcy period from three years to 1 year. If this proposal is passed, it will have a significant effect on the stigma linked with bankruptcy and the financial consequences that bankrupts will experience in the future. While lots of people understand the idea of bankruptcy, lots of individuals wouldn’t know where to start if they determined that declaring bankruptcy is the best option 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 made up your mind that bankruptcy is the best option for you, always consult with a registered bankruptcy trustee prior to making any concrete decisions. There is an enormous difference between a firm that charges you to declare bankruptcy and a legally registered bankruptcy trustee firm. Most of the time, 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.
- Download the forms needed to file for bankruptcy
If you’ve come to the conclusion that bankruptcy is the best option for your individual circumstances, there are two sets of documents that you will need to complete 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 on this link to download: https://www.afsa.gov.au/insolvency/how-we-can-help/forms-list/statement-affairs).
- Compile your supporting documents.
In almost all bankruptcy cases, individuals must present evidence that their claims are correct by supplying various supporting documents. Usually, this will include the following:
- Income statements and personal tax returns
- Company tax returns (if you are a company 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 essential to note that failing to deliver accurate information or any effort to conceal information that would normally be relevant to your bankruptcy case is a severe 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 properly. It is integral 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 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 the same page and use it to fill in additional information. Moreover, 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 ensure you are submitting it within 28 days of you signing it. At Bankruptcy Experts Port Stephens, we understand that all the paperwork can be a bit confusing, so if you have any questions 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.bankruptcyexpertsportstephens.com.au.