Many Australian’s have only really thought about bankruptcy when playing a game of Monopoly with their mates! In spite of this, there are an estimated 13,000 people that file for bankruptcy yearly in Australia. It’s incredible how fast people can go from being in a healthy financial position to tackling a mountain of debt. Most of the time, unfortunate events such as loss of income, divorce, or unanticipated medical costs will lead to serious financial issues within just a few months. Instead of 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.
A short time ago, the Australian Government proposed changes to bankruptcy laws that decrease the bankruptcy time frame from three years to 1 year. If this bill is passed, it will have a remarkable effect on the stigma associated with bankruptcy and the financial repercussions that bankrupts will experience in the future. Even though many individuals understand the principle of bankruptcy, most 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 file for bankruptcy in Australia.
- Get advice from a registered bankruptcy trustee
If you’ve determined that bankruptcy is the best approach for you, always seek advice from a registered bankruptcy trustee before making any concrete decisions. There is a massive difference between a firm that charges you to file for bankruptcy and a legitimately 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 healthy recovery after you have been discharged.
- Download the forms needed 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 (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).
- Gather your supporting documents.
In nearly all bankruptcy cases, individuals need to present evidence that their claims are correct 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 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 failure 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 honestly to make sure it gets processed successfully. It’s important that you include the address information 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 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 in further details. 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 submitting it within 28 days of you signing it. At Bankruptcy Experts Frankston, we understand that all the paperwork can be a bit overwhelming, so if you have any inquiries regarding your any of your answers, it’s best to contact us on 1300 795 575 to ensure you get it right the first time. Alternatively, visit our website for more information: www.bankruptcyexpertsfrankston.com.au.