Many Australian’s have only truly contemplated bankruptcy when playing a game of Monopoly with their friends! In spite of this, there are somewhere around 13,000 people that file for bankruptcy each year in Australia. It’s astonishing how easily individuals can go from enjoying a healthy financial position to grappling a mountain of debt. Typically, events like loss of work, divorce, or unanticipated medical expenses will generate serious financial problems within just a couple of months. Rather than wrestling with these debts for several years and ignoring the elephant in the room, it’s much better to cut your losses and seek financial help immediately.
A short time ago, the Australian Government proposed changes to bankruptcy laws that decrease the bankruptcy period from three years to 1 year. If this proposed act is passed, it will have a dramatic impact on the stigma related to bankruptcy and the financial implications that bankrupts will encounter down the road. While many individuals understand the concept of bankruptcy, many people wouldn’t know where to start if they determined that filing for bankruptcy is the best solution 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 determined that bankruptcy is the best solution for you, always speak with a registered bankruptcy trustee prior to making any concrete decisions. There is a considerable difference between a firm that charges you to declare bankruptcy and a legally 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 healthy recovery after you have been discharged.
- Download the forms needed to declare bankruptcy
If you’ve made the decision that bankruptcy is the best solution for your individual scenario, there are two sets of documents that you will need to complete in order to declare 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 (click here 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 must offer evidence that their claims are accurate by supplying a variety of 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 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 each and every question in your bankruptcy paperwork accurately and honestly to ensure it gets processed effectively. It’s 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 provide at the very least 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 that page and use it to fill in extra details. Additionally, be careful to include all assets sold in the last 5 years in question 33.
- Lodge your bankruptcy paperwork.
Before you lodge your bankruptcy paperwork, check the date to ensure you are lodging it within 28 days of you signing it. At Bankruptcy Experts Coffs Harbour, we understand that all the paperwork can be a bit complicated, so if you have any questions 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 further information: www.bankruptcyexpertscoffsharbour.com.au.