Many Australian’s have only really thought about bankruptcy when playing a game of Monopoly with their buddies! In spite of this, there are around 13,000 individuals that declare bankruptcy yearly in Australia. It’s extraordinary how easily individuals can go from being in a healthy financial position to confronting a mountain of debt. Most of the time, unfortunate events such as loss of employment, divorce, or sudden medical expenses will spark serious financial complications 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 guidance immediately.
Just recently, the Australian Government proposed changes to bankruptcy laws that lower the bankruptcy term from 3 years to 1 year. If this proposal is passed, it will have a significant impact on the stigma linked to bankruptcy and the financial penalties that bankrupts will face down the road. While many people understand the principle of bankruptcy, lots of people wouldn’t know where to start if they determined that declaring bankruptcy is the best solution for them. To provide 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 determined that bankruptcy is the best solution for you, always seek guidance from a registered bankruptcy trustee before making any concrete decisions. There is a vast 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 be 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 complete 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 choice for your individual position, there are two sets of documents that you will need to complete for you to declare bankruptcy:
- The Debtor’s Petition, which is a 3 page document (click here 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 almost all bankruptcy cases, individuals must 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 business owner)
- Centrelink benefits statement (if appropriate)
- 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 vital to note that failure to provide accurate information or any attempt to conceal information that would otherwise be relevant to your bankruptcy case is a serious 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 properly. It is imperative that you include the address details of all your lenders in the secured and unsecured sections of the bankruptcy paperwork. In the Debtor’s Petition, you’ll need to supply at least two types of ID. If you’re unclear of which forms of ID are accepted, check the AFSA website (https://www.afsa.gov.au). If you don’t have enough space when addressing 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 submit your bankruptcy paperwork, inspect the date to ensure you are lodging it within 28 days of you signing it. At Bankruptcy Experts Mildura, we understand that all the paperwork can be a bit overwhelming, so if you have any concerns 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 more information: www.bankruptcyexpertsmildura.com.au.