The majority of Australian’s have only honestly considered bankruptcy when playing a game of Monopoly with their friends! In spite of this, there are nearly 13,000 individuals that declare bankruptcy every year in Australia. It’s extraordinary how rapidly people can go from enjoying a healthy financial position to facing a mountain of debt. In many cases, situations like loss of employment, divorce, or sudden medical costs will spark serious financial challenges within just a few months. In lieu of 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 help as quickly as possible.
A few months ago, the Australian Government proposed changes to bankruptcy laws that lower the bankruptcy term from three years to 1 year. If this bill is passed, it will have a powerful impact on the stigma related to bankruptcy and the financial consequences that bankrupts will experience down the road. Although lots of people understand the idea of bankruptcy, many people wouldn’t know where to start if they decided that filing for bankruptcy is the best alternative for them. To offer 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 determined that bankruptcy is the best choice for you, always speak to a registered bankruptcy trustee before making any concrete decisions. There is a massive difference between a firm that charges you to file for bankruptcy and a legitimately 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 help 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 declare bankruptcy
If you’ve made the decision that bankruptcy is the best choice for your individual position, there are two sets of documents that you will need to complete in order to file for bankruptcy:
- The Debtor’s Petition, which is a 3 page document (click on this link 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).
- Gather your supporting documents.
In nearly all bankruptcy proceedings, individuals need to provide evidence that their claims are accurate by supplying a variety of 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 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 very important to note that failure to supply accurate information or any effort to conceal information that would normally relate to your bankruptcy case is a severe offence that is punishable in a criminal court.
- Complete the bankruptcy paperwork.
You must respond to each and every question in your bankruptcy paperwork accurately and truthfully to make sure it gets processed correctly. It is imperative that you include the address details of all your creditors in the secured and unsecured sections of the bankruptcy paperwork. In the Debtor’s Petition, you’ll need to present at the very least two types of ID. If you’re not sure of which forms of ID are acceptable, check the AFSA website (https://www.afsa.gov.au). If you don’t have enough space when answering any questions, simply print out another copy of the same page and use it to fill in additional details. Also, be careful to include all assets sold in the last 5 years in question 33.
- Lodge 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 Shellharbour, we understand that all the paperwork can be a bit overpowering, so if you have any questions 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: www.bankruptcyexpertsshellharbour.com.au.