Most Australian’s have only seriously thought about bankruptcy when playing a game of Monopoly with their mates! In spite of this, there are about 13,000 people that declare bankruptcy every year in Australia. It’s uncanny how rapidly individuals can go from being in a balanced financial position to confronting a mountain of debt. Generally, events like loss of income, divorce, or unanticipated medical expenditures will result in serious financial complications within just a few months. As opposed to 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 quickly as possible.
A short time ago, the Australian Government proposed changes to bankruptcy laws that lower the bankruptcy term from 3 years to 1 year. If this proposed act is passed, it will have a powerful effect on the stigma linked to bankruptcy and the financial implications that bankrupts will encounter in the future. Even though lots of individuals understand the concept 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 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 alternative for you, always speak to a registered bankruptcy trustee prior to making any concrete decisions. There is an enormous difference between a firm that charges you to declare bankruptcy and a legally registered bankruptcy trustee firm. In most cases, 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 help 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 needed to file for bankruptcy
If you’ve made the decision that bankruptcy is the best alternative for your individual scenario, 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 (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 (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 nearly all bankruptcy cases, individuals must offer evidence that their claims are correct by supplying numerous supporting documents. Generally, this will include the following:
- Income statements and personal tax returns
- Company tax returns (if you are a company 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 integral to note that failing to provide accurate information or any attempt 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 address each question in your bankruptcy paperwork accurately and truthfully to make sure it gets processed effectively. It is paramount 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 supply 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 run out of space when responding to any questions, simply print out another copy of the same page and use it to fill in additional 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 lodging it within 28 days of you signing it. At Bankruptcy Experts Maitland, we understand that all the paperwork can be a bit overpowering, so if you have any questions 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 further information: www.bankruptcyexpertsmaitland.com.au.