Many Australian’s have only honestly thought about bankruptcy when playing a game of Monopoly with their buddies! Despite this, there are roughly 13,000 individuals that declare bankruptcy each year in Australia. It’s astonishing how quickly individuals can go from enjoying a healthy financial position to facing a mountain of debt. In many cases, situations such as loss of income, divorce, or unexpected medical costs will cause serious financial complications within just a couple of months. Instead of wrestling with these debts for many years and ignoring the elephant in the room, it’s far better to cut your losses and seek financial assistance as soon as possible.
Just recently, the Australian Government proposed changes to bankruptcy laws that decrease the bankruptcy time frame from 3 years to 1 year. If this bill is passed, it will have a remarkable effect on the stigma connected with bankruptcy and the financial implications that bankrupts will encounter down the road. While lots of folks understand the concept of bankruptcy, lots of individuals wouldn’t know where to start if they determined that declaring bankruptcy is the best option 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 made up your mind that bankruptcy is the best option for you, always seek guidance from a registered bankruptcy trustee prior to 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. Most of the time, bankruptcy firms are not the same as registered bankruptcy trustee firms, so make 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 file for bankruptcy
If you’ve decided that bankruptcy is the best option for your individual situation, there are two sets of documents that you will need to complete if you want to declare 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).
- Gather your supporting documents.
In nearly all bankruptcy cases, individuals need to provide evidence that their claims are accurate by supplying numerous supporting documents. Normally, 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 failing to supply accurate information or any effort to hide information that would otherwise relate to your bankruptcy proceedings is a severe 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 make sure it gets processed properly. It is essential 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 a minimum of two types of ID. If you’re uncertain of which forms of ID are acceptable, 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 additional information. Furthermore, 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 lodging it within 28 days of you signing it. At Bankruptcy Experts Dubbo, we understand that all the paperwork can be a bit complicated, so if you have any concerns 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 further information: www.bankruptcyexpertsdubbo.com.au.