Top 5 Tips on How to File For Bankruptcy in Australia
Most Australian’s have only really considered bankruptcy when playing a game of Monopoly with their buddies! In spite of this, there are an estimated 13,000 individuals that file for bankruptcy yearly in Australia. It’s uncanny how fast individuals can go from experiencing a balanced financial position to grappling a mountain of debt. Commonly, situations like loss of work, divorce, or unforeseen medical expenditures will trigger serious financial issues within just a few months. As opposed to 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 guidance as soon as possible.
A few months ago, the Australian Government proposed changes to bankruptcy laws that lower the bankruptcy period from 3 years to 1 year. If this bill is passed, it will have a significant impact on the stigma associated with bankruptcy and the financial penalties that bankrupts will face in the future. While most people understand the idea of bankruptcy, lots of people wouldn’t know where to start if they determined that declaring 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 decided that bankruptcy is the best option for you, always speak to a registered bankruptcy trustee prior to making any concrete decisions. There is a significant 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 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 required to declare bankruptcy
If you’ve made the decision that bankruptcy is the best solution for your individual position, there are two sets of documents that you will need to complete if you want to file for 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 (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 nearly all bankruptcy proceedings, individuals need 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 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 essential to note that failing to deliver accurate information or any effort to hide information that would otherwise relate to your bankruptcy case is a severe offence that is punishable in a criminal court.
- Complete the bankruptcy paperwork.
You must answer each and every question in your bankruptcy paperwork accurately and truthfully to ensure it gets processed effectively. It is crucial that you include the address details of all your creditors in the secured and unsecured sections of the bankruptcy paperwork. In the Debtor’s Petition, you’ll need to provide at least two types of ID. If you’re unsure of which forms of ID are accepted, check the AFSA website (https://www.afsa.gov.au). If you run out of space when answering any questions, simply print out another copy of the same page and use it to fill out extra information. Additionally, 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, inspect the date to make sure you are lodging it within 28 days of you signing it. At Bankruptcy Experts Bunbury, we understand that all the paperwork can be a bit over-bearing, so if you have any concerns 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.bankruptcyexpertsbunbury.com.au.