The majority of Australian’s have only seriously considered bankruptcy when playing a game of Monopoly with their friends! In spite of this, there are roughly 13,000 people that file for bankruptcy each year in Australia. It’s extraordinary how quickly individuals can go from experiencing a balanced financial position to facing a mountain of debt. Usually, unfortunate events such as loss of income, divorce, or unanticipated medical costs will trigger serious financial issues 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 help as quickly as possible.
In recent months, the Australian Government proposed changes to bankruptcy laws that reduce the bankruptcy time frame 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 penalties that bankrupts will experience in the future. While many people understand the principle 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 offer some insight, here are the top 5 tips on how to declare bankruptcy in Australia.
- Get advice from a registered bankruptcy trustee
If you’ve made up your mind that bankruptcy is the best option for you, always consult with a registered bankruptcy trustee before making any concrete decisions. There is a massive difference between a firm that charges you to declare bankruptcy and a legally registered bankruptcy trustee firm. Most of the time, bankruptcy firms are not the same as registered bankruptcy trustee firms, so ensure 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 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).
- Compile your supporting documents.
In nearly all bankruptcy proceedings, individuals have to 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 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 imperative to note that failing to provide accurate information or any attempt to conceal information that would normally be relevant to your bankruptcy case is a serious offence that is punishable in a criminal court.
- Complete the bankruptcy paperwork.
You must respond to each question in your bankruptcy paperwork accurately and honestly to ensure it gets processed effectively. It is essential that you include the address information 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 unsure of which forms of ID are acceptable, check the AFSA website (https://www.afsa.gov.au). If you run out of space when addressing any questions, simply print out another copy of the same page and use it to fill out extra details. 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 make sure you are lodging it within 28 days of you signing it. At Bankruptcy Experts Fremantle, we understand that all the paperwork can be a bit confusing, 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.bankruptcyexpertsfremantle.com.au.