Most Australian’s have only truly thought about bankruptcy when playing a game of Monopoly with their buddies! Despite this, there are around 13,000 people that declare bankruptcy every year in Australia. It’s uncanny how fast people can go from enjoying a balanced financial position to facing a mountain of debt. Generally, circumstances like loss of work, divorce, or unanticipated medical expenditures will cause serious financial challenges within just a few months. Rather than wrestling with these debts for many years and ignoring the elephant in the room, it’s far better to cut your losses and seek financial guidance as quickly as possible.
Just recently, the Australian Government proposed changes to bankruptcy laws that lower the bankruptcy term from three years to 1 year. If this bill is passed, it will have a remarkable impact on the stigma linked with bankruptcy and the financial consequences that bankrupts will face down the road. While lots of individuals understand the principle of bankruptcy, most people wouldn’t know where to start if they determined that filing for bankruptcy is the best solution 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 decided that bankruptcy is the best solution for you, always talk with a registered bankruptcy trustee prior to 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. Most of the time, 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 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 file for bankruptcy
If you’ve come to the conclusion that bankruptcy is the best alternative for your individual situation, 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 (click here 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 must provide 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 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 very important to note that failure to provide accurate information or any effort to hide information that would normally be relevant to your bankruptcy case is a severe 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 make sure it gets processed correctly. 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 provide a minimum of two types of ID. If you’re uncertain 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 additional information. At the same time, 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, check the date to ensure you are submitting it within 28 days of you signing it. At Bankruptcy Experts Sunshine Coast, we understand that all the paperwork can be a bit frustrating, so if you have any inquiries 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 additional information: www.bankruptcyexpertssunshinecoast.com.au.