Most Australian’s have only honestly considered bankruptcy when playing a game of Monopoly with their buddies! In spite of this, there are close to 13,000 individuals that declare bankruptcy yearly in Australia. It’s extraordinary how quickly people can go from being in a balanced financial position to confronting a mountain of debt. Usually, situations such as loss of income, divorce, or sudden medical expenditures will lead to serious financial challenges 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 as soon as possible.
Not long ago, the Australian Government proposed changes to bankruptcy laws that reduce the bankruptcy duration from 3 years to 1 year. If this proposed act is passed, it will have a significant effect on the stigma related to bankruptcy and the financial penalties that bankrupts will experience down the road. While lots of individuals understand the idea of bankruptcy, many people wouldn’t know where to start if they decided 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.
- Get guidance from a registered bankruptcy trustee
If you’ve made up your mind that bankruptcy is the best option for you, always speak to a registered bankruptcy trustee prior to making any concrete decisions. There is a huge difference between a firm that charges you to declare bankruptcy and a legitimately 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 help 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 needed to file for bankruptcy
If you’ve come to the conclusion 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 (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 here to download: https://www.afsa.gov.au/insolvency/how-we-can-help/forms-list/statement-affairs).
- Collect your supporting documents.
In nearly all bankruptcy cases, individuals must present evidence that their claims are correct by supplying a variety of supporting documents. Normally, 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’s important to note that failing to provide accurate information or any effort to hide information that would otherwise relate to your bankruptcy case is a serious offence that is punishable in a criminal court.
- Complete the bankruptcy paperwork.
You must answer every question in your bankruptcy paperwork accurately and truthfully to make sure it gets processed successfully. It is essential 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 not sure of which forms of ID are accepted, check the AFSA website (https://www.afsa.gov.au). If you don’t have enough space when answering any questions, simply print out another copy of that page and use it to fill in further information. Furthermore, 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, check the date to make sure you are lodging it within 28 days of you signing it. At Bankruptcy Experts Emerald, 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 call us on 1300 795 575 to ensure you get it right the first time. Alternatively, visit our website for further information: www.bankruptcyexpertsemerald.com.au.