Top 5 Tips on How to Declare Bankruptcy in Australia
Most Australian’s have only seriously thought about bankruptcy when playing a game of Monopoly with their friends! In spite of this, there are somewhere around 13,000 individuals that declare bankruptcy each year in Australia. It’s extraordinary how easily people can go from being in a balanced financial position to dealing with a mountain of debt. Usually, situations like loss of income, divorce, or unexpected medical expenses will lead to serious financial complications within just a couple of 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 guidance as quickly as possible.
Recently, the Australian Government proposed changes to bankruptcy laws that decrease the bankruptcy term from three years to 1 year. If this bill is passed, it will have a dramatic effect on the stigma linked to bankruptcy and the financial repercussions that bankrupts will experience in the future. Even though lots of folks understand the idea of bankruptcy, most people wouldn’t know where to start if they decided that filing for bankruptcy is the best alternative for them. To provide some insight, here are the top 5 tips on how to declare bankruptcy in Australia.
- Get guidance from a registered bankruptcy trustee
If you’ve decided that bankruptcy is the best approach for you, always speak with a registered bankruptcy trustee before making any concrete decisions. There is a considerable difference between a firm that charges you to file for bankruptcy and a legally registered bankruptcy trustee firm. In many 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 full recovery after you have been discharged.
- Download the forms required to declare bankruptcy
If you’ve decided that bankruptcy is the best option for your individual position, 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 (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 provide evidence that their claims are correct by supplying numerous supporting documents. Commonly, 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 vital to note that failing to deliver accurate information or any effort 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 address every question in your bankruptcy paperwork accurately and truthfully to make sure it gets processed correctly. It is essential 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 provide a minimum of two types of ID. If you’re uncertain of which forms of ID are accepted, check the AFSA website (https://www.afsa.gov.au). If you run out of space when responding to any questions, simply print out another copy of that page and use it to fill in further information. Also, be careful to include all assets sold in the last 5 years in question 33.
- Submit your bankruptcy paperwork.
Before you submit your bankruptcy paperwork, inspect the date to ensure you are submitting it within 28 days of you signing it. At Bankruptcy Experts Tablelands, we understand that all the paperwork can be a bit frustrating, so if you have any inquiries regarding your any of your answers, it’s best to call us on 1300 795 575 to ensure you get it right the first time. Alternatively, visit our website for further information: www.bankruptcyexpertstablelands.com.au.