Most Australian’s have only honestly contemplated bankruptcy when playing a game of Monopoly with their mates! In spite of this, there are approximately 13,000 individuals that file for bankruptcy each year in Australia. It’s astonishing how quickly people can go from being in a balanced financial position to grappling a mountain of debt. In most cases, unfortunate events like loss of income, divorce, or unexpected medical costs will result in serious financial complications within just a few months. In lieu 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 quickly as possible.
Not long ago, the Australian Government proposed changes to bankruptcy laws that cut down the bankruptcy period from 3 years to 1 year. If this proposed act is passed, it will have a powerful effect on the stigma associated with bankruptcy and the financial consequences that bankrupts will encounter down the road. Although lots of individuals understand the principle of bankruptcy, lots of individuals wouldn’t know where to start if they determined that declaring bankruptcy is the best solution for them. To give 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 seek guidance from a registered bankruptcy trustee before making any concrete decisions. There is a tremendous 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 healthy recovery after you have been discharged.
- Download the forms required to file for bankruptcy
If you’ve come to the conclusion that bankruptcy is the best solution for your individual scenario, 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 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 (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 a variety of supporting documents. Generally, this will include the following:
- Income statements and personal tax returns
- Company tax returns (if you are a business 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 crucial to note that failure to deliver accurate information or any attempt to conceal information that would otherwise be relevant to your bankruptcy case is a serious offence that is punishable in a criminal court.
- Complete the bankruptcy paperwork.
You must respond to every question in your bankruptcy paperwork accurately and honestly to ensure it gets processed properly. It is crucial 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 supply a minimum of two types of ID. If you’re not sure of which forms of ID are accepted, check the AFSA website (https://www.afsa.gov.au). If you run out of space when addressing any questions, simply print out another copy of the same page and use it to fill out further details. 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, inspect the date to ensure you are lodging it within 28 days of you signing it. At Bankruptcy Experts Port Macquarie, 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 additional information: www.bankruptcyexpertsportmacquarie.com.au.