Top 5 Tips on How to File For Bankruptcy in Australia
Most Australian’s have only really contemplated bankruptcy when playing a game of Monopoly with their buddies! Despite this, there are approximately 13,000 individuals that declare bankruptcy yearly in Australia. It’s astounding how rapidly people can go from enjoying a healthy financial position to facing a mountain of debt. In many cases, unfortunate events like loss of income, divorce, or unexpected medical expenditures will result in serious financial complications within just a couple of months. In lieu of wrestling with these debts for years and ignoring the elephant in the room, it’s much better to cut your losses and seek financial guidance as quickly as possible.
Just recently, the Australian Government proposed changes to bankruptcy laws that decrease the bankruptcy period from 3 years to 1 year. If this proposal is passed, it will have a powerful impact on the stigma linked with bankruptcy and the financial consequences that bankrupts will face down the road. While lots of folks understand the idea of bankruptcy, most people wouldn’t know where to start if they determined that filing for bankruptcy is the best option for them. To offer 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 made up your mind that bankruptcy is the best option for you, always speak to 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 legitimately 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 needed to file for bankruptcy
If you’ve made the decision that bankruptcy is the best alternative for your individual position, 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 (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 (visit this site to download: https://www.afsa.gov.au/insolvency/how-we-can-help/forms-list/statement-affairs).
- Compile your supporting documents.
In almost all bankruptcy proceedings, individuals need to provide evidence that their claims are accurate by supplying numerous supporting documents. Generally, this will include the following:
- Income statements and personal tax returns
- Company tax returns (if you are a business owner)
- Centrelink benefits statement (if applicable)
- 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 paramount to note that failing to supply accurate information or any attempt to conceal information that would otherwise be relevant to your bankruptcy proceedings is a severe offence that is punishable in a criminal court.
- Complete the bankruptcy paperwork.
You must address every question in your bankruptcy paperwork accurately and honestly to ensure it gets processed successfully. It is very important 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 supply at the very least two types of ID. If you’re not sure of which forms of ID are acceptable, 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 out additional information. Additionally, 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, inspect the date to ensure you are submitting it within 28 days of you signing it. At Bankruptcy Experts Canberra, 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 further information: www.bankruptcyexpertscanberra.com.au.