Many Australian’s have only really thought about bankruptcy when playing a game of Monopoly with their mates! Despite this, there are somewhere around 13,000 individuals that file for bankruptcy every year in Australia. It’s extraordinary how fast people can go from enjoying a healthy financial position to tackling a mountain of debt. In many cases, events like loss of work, divorce, or sudden medical costs will lead to serious financial challenges within just a couple of months. In lieu of wrestling with these debts for years and ignoring the elephant in the room, it’s far better to cut your losses and seek financial assistance immediately.
Just recently, the Australian Government proposed changes to bankruptcy laws that cut down the bankruptcy period from 3 years to 1 year. If this proposed act is passed, it will have a dramatic impact on the stigma linked with bankruptcy and the financial repercussions that bankrupts will encounter down the road. Even though many people understand the idea of bankruptcy, lots of folks wouldn’t know where to start if they decided that declaring bankruptcy is the best option for them. To offer some insight, here are the top 5 tips on how to file for bankruptcy in Australia.
- Seek guidance from a registered bankruptcy trustee
If you’ve determined that bankruptcy is the best choice for you, always consult with a registered bankruptcy trustee prior to making any concrete decisions. There is a huge 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 ensure you get the right advice the first time so you can make the best financial decision. The right advice will not only aid 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 declare bankruptcy
If you’ve decided 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 almost all bankruptcy cases, individuals have to offer evidence that their claims are accurate by supplying a variety of 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 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 failure to supply accurate information or any effort 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 address each question in your bankruptcy paperwork accurately and truthfully to ensure it gets processed properly. It is crucial 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 at the very least two types of ID. If you’re unclear 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 that page and use it to fill in extra details. At the same time, 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 Dandenong, we understand that all the paperwork can be a bit over-bearing, so if you have any questions regarding your any of your answers, it’s best to give us a ring on 1300 795 575 to ensure you get it right the first time. Alternatively, visit our website for more information: www.bankruptcyexpertsdandenong.com.au.