Most Australian’s have only honestly thought about bankruptcy when playing a game of Monopoly with their mates! In spite of this, there are approximately 13,000 individuals that declare bankruptcy yearly in Australia. It’s uncanny how rapidly individuals can go from being in a healthy financial position to facing a mountain of debt. In many cases, events such as loss of employment, divorce, or unexpected medical expenses will induce serious financial challenges within just a few months. Rather than wrestling with these debts for years and ignoring the elephant in the room, it’s much better to cut your losses and seek financial help immediately.
Recently, the Australian Government proposed changes to bankruptcy laws that lower the bankruptcy time frame from three years to 1 year. If this proposal is passed, it will have a significant impact on the stigma related to bankruptcy and the financial penalties that bankrupts will face in the future. While many individuals understand the principle of bankruptcy, most people 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.
- 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 huge 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 make 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 complete recovery after you have been discharged.
- Download the forms required to declare bankruptcy
If you’ve come to the conclusion that bankruptcy is the best alternative for your individual position, there are two sets of documents that you will need to complete to file for 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 (visit this site to download: https://www.afsa.gov.au/insolvency/how-we-can-help/forms-list/statement-affairs).
- Collect your supporting documents.
In almost all bankruptcy proceedings, individuals must present evidence that their claims are correct by supplying various 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’s important to note that failure to deliver accurate information or any attempt to hide information that would otherwise be relevant to your bankruptcy case is a severe offence that is punishable in a criminal court.
- Complete the bankruptcy paperwork.
You must address each question in your bankruptcy paperwork accurately and truthfully to make sure it gets processed successfully. It is essential that you include the address details of all your lenders in the secured and unsecured sections of the bankruptcy paperwork. In the Debtor’s Petition, you’ll need to present at the very least two types of ID. If you’re unsure of which forms of ID are accepted, check the AFSA website (https://www.afsa.gov.au). If you don’t have enough space when answering any questions, simply print out another copy of the same page and use it to fill in further details. 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 submitting it within 28 days of you signing it. At Bankruptcy Experts Shepparton, we understand that all the paperwork can be a bit overwhelming, 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 additional information: www.bankruptcyexpertsshepparton.com.au.