The majority of Australian’s have only really thought about bankruptcy when playing a game of Monopoly with their buddies! Despite this, there are roughly 13,000 people that file for bankruptcy each year in Australia. It’s extraordinary how easily individuals can go from being in a balanced financial position to facing a mountain of debt. Generally, circumstances such as loss of employment, divorce, or unforeseen medical costs will spark serious financial issues within just a couple of months. Rather than 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 as soon as possible.
A few months ago, the Australian Government proposed changes to bankruptcy laws that decrease the bankruptcy period from 3 years to 1 year. If this proposal is passed, it will have a significant effect on the stigma connected with bankruptcy and the financial repercussions that bankrupts will encounter down the road. Although lots of folks understand the notion of bankruptcy, lots of individuals wouldn’t know where to start if they decided that declaring bankruptcy is the best alternative for them. To provide some insight, here are the top 5 tips on how to declare bankruptcy in Australia.
1. Seek guidance from a registered bankruptcy trustee
If you’ve made up your mind that bankruptcy is the best solution for you, always speak with a registered bankruptcy trustee prior to making any concrete decisions. There is a considerable 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 assist you with your decision-making, but also put you in the best position to make a full recovery after you have been discharged.
2. Download the forms needed to declare bankruptcy
If you’ve made the decision that bankruptcy is the best decision for your individual situation, there are two sets of documents that you will need to complete for you to file for 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 on this link to download: https://www.afsa.gov.au/insolvency/how-we-can-help/forms-list/statement-affairs).
3. Gather your supporting documents.
In nearly all bankruptcy cases, individuals must provide evidence that their claims are accurate 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 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 very important to note that failing to provide accurate information or any attempt to hide information that would otherwise relate to your bankruptcy proceedings is a severe offence that is punishable in a criminal court.
4. Complete the bankruptcy paperwork.
You must respond to each and every question in your bankruptcy paperwork accurately and truthfully to ensure it gets processed properly. It is crucial 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 the very least two types of ID. If you’re not sure of which forms of ID are acceptable, 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 information. In addition, be careful to include all assets sold in the last 5 years in question 33.
5. 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 Newcastle, we understand that all the paperwork can be a bit difficult, so if you have any inquiries 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.bankruptcyexpertsnewcastle.com.au.