Top 5 Tips on How to Declare Bankruptcy in Australia
The majority of Australian’s have only truly contemplated bankruptcy when playing a game of Monopoly with their buddies! Despite this, there are somewhere around 13,000 people that file for bankruptcy each year in Australia. It’s extraordinary how easily people can go from being in a balanced financial position to grappling a mountain of debt. Most of the time, events such as loss of work, divorce, or unanticipated medical costs will trigger serious financial challenges within just a couple of months. Instead 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 guidance immediately.
A few months ago, the Australian Government proposed changes to bankruptcy laws that cut down the bankruptcy time frame from 3 years to 1 year. If this bill is passed, it will have a remarkable impact on the stigma associated with bankruptcy and the financial consequences that bankrupts will face down the road. Although most people understand the idea of bankruptcy, most individuals wouldn’t know where to start if they determined that declaring bankruptcy is the best option for them. To provide 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 solution for you, always seek advice from a registered bankruptcy trustee before making any concrete decisions. There is an enormous difference between a firm that charges you to declare 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 assist 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 alternative for your individual circumstances, 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 here 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 almost all bankruptcy proceedings, individuals must present evidence that their claims are correct by supplying an assortment of supporting documents. Normally, this will include the following:
- Income statements and personal tax returns
- Company tax returns (if you are a company owner)
- Centrelink benefits statement (if appropriate)
- 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 vital to note that failing to provide accurate information or any attempt to hide information that would otherwise be relevant to your bankruptcy proceedings 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 make sure it gets processed successfully. It is integral that you include the address information of all your lenders 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 unclear of which forms of ID are accepted, 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 further details. In addition, 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, check the date to make sure you are submitting it within 28 days of you signing it. At Bankruptcy Experts Melbourne, we understand that all the paperwork can be a bit difficult, 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 more information: www.bankruptcyexpertsmelbourne.com.au.