Many Australian’s have only seriously contemplated bankruptcy when playing a game of Monopoly with their friends! In spite of this, there are close to 13,000 individuals that file for bankruptcy each year in Australia. It’s uncanny how easily people can go from experiencing a balanced financial position to facing a mountain of debt. In many cases, unfortunate events like loss of income, divorce, or unforeseen medical costs will induce serious financial complications within just a few months. As opposed to wrestling with these debts for years and ignoring the elephant in the room, it’s much better to cut your losses and seek financial support as soon as possible.
Not long ago, the Australian Government proposed changes to bankruptcy laws that reduce the bankruptcy term from three years to 1 year. If this proposal is passed, it will have a powerful effect on the stigma associated with bankruptcy and the financial consequences that bankrupts will face down the road. While lots of people understand the idea of bankruptcy, lots of folks wouldn’t know where to start if they determined that declaring bankruptcy is the best option for them. To offer some insight, here are the top 5 tips on how to declare bankruptcy in Australia.
- Seek advice from a registered bankruptcy trustee
If you’ve made up your mind that bankruptcy is the best choice for you, always seek advice from a registered bankruptcy trustee before making any concrete decisions. There is a vast 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 assist you with your decision-making, but also put you in the best position to make a complete recovery after you have been discharged.
- Download the forms required to declare bankruptcy
If you’ve decided that bankruptcy is the best solution for your individual position, 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 (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).
- Collect your supporting documents.
In almost all bankruptcy cases, individuals need to provide evidence that their claims are correct by supplying various supporting documents. Usually, 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 integral to note that failing to supply accurate information or any effort to hide information that would normally relate to your bankruptcy case is a severe offence that is punishable in a criminal court.
- Complete the bankruptcy paperwork.
You must reply to every question in your bankruptcy paperwork accurately and honestly to make sure it gets processed properly. It is imperative 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 present at the very least two types of ID. If you’re unclear 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 out further information. 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, check the date to make sure you are lodging it within 28 days of you signing it. At Bankruptcy Experts Perth, 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 give us a call on 1300 795 575 to ensure you get it right the first time. Alternatively, visit our website for additional information: www.bankruptcyexpertsperth.com.au.