Most Australian’s have only seriously contemplated bankruptcy when playing a game of Monopoly with their friends! In spite of this, there are around 13,000 individuals that declare bankruptcy every year in Australia. It’s astounding how quickly individuals can go from being in a healthy financial position to confronting a mountain of debt. Usually, circumstances such as loss of employment, divorce, or unanticipated medical costs will cause serious financial issues within just a few 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 as soon as possible.
In recent months, the Australian Government proposed changes to bankruptcy laws that decrease the bankruptcy duration from 3 years to 1 year. If this proposal is passed, it will have a significant effect on the stigma associated with bankruptcy and the financial implications that bankrupts will encounter in the future. Although lots of individuals understand the principle of bankruptcy, lots of folks wouldn’t know where to start if they determined that declaring bankruptcy is the best option for them. To give some insight, here are the top 5 tips on how to file for 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 massive 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 file for bankruptcy
If you’ve made the decision that bankruptcy is the best option 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 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 (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 have to provide 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 integral to note that failing to supply accurate information or any effort to hide 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 every question in your bankruptcy paperwork accurately and truthfully to ensure it gets processed successfully. 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 at the very least two types of ID. If you’re uncertain of which forms of ID are accepted, check the AFSA website (https://www.afsa.gov.au). If you don’t have enough space when responding to any questions, simply print out another copy of the same page and use it to fill out extra details. In addition, 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 ensure you are submitting it within 28 days of you signing it. At Bankruptcy Experts Gympie, we understand that all the paperwork can be a bit confusing, so if you have any questions 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 further information: www.bankruptcyexpertsgympie.com.au.