Many Australian’s have only seriously considered bankruptcy when playing a game of Monopoly with their mates! In spite of this, there are somewhere around 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 facing a mountain of debt. Usually, circumstances such as loss of income, divorce, or sudden medical expenditures will induce serious financial problems within just a few 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 support immediately.
In recent months, the Australian Government proposed changes to bankruptcy laws that reduce the bankruptcy period from 3 years to 1 year. If this proposal is passed, it will have a powerful effect on the stigma connected with bankruptcy and the financial implications that bankrupts will experience in the future. Although most people understand the idea of bankruptcy, lots of folks wouldn’t know where to start if they determined that filing for bankruptcy is the best alternative for them. To give some insight, here are the top 5 tips on how to file for bankruptcy in Australia.
- Get advice from a registered bankruptcy trustee
If you’ve made up your mind that bankruptcy is the best alternative for you, always talk with a registered bankruptcy trustee prior to making any concrete decisions. There is a vast difference between a firm that charges you to file for bankruptcy and a legally registered bankruptcy trustee firm. In most cases, 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 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 file for bankruptcy
If you’ve come to the conclusion that bankruptcy is the best option for your individual scenario, there are two sets of documents that you will need to complete in order 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 here to download: https://www.afsa.gov.au/insolvency/how-we-can-help/forms-list/statement-affairs).
- Collect your supporting documents.
In nearly all bankruptcy cases, individuals need to offer evidence that their claims are correct 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 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 imperative to note that failure 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 answer each question in your bankruptcy paperwork accurately and truthfully to make sure it gets processed correctly. It is integral 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 least two types of ID. If you’re unsure 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. In addition, 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 make sure you are lodging it within 28 days of you signing it. At Bankruptcy Experts Whitsundays, we understand that all the paperwork can be a bit over-bearing, so if you have any concerns 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.bankruptcyexpertswhitsundays.com.au.