Many Australian’s have only seriously contemplated bankruptcy when playing a game of Monopoly with their mates! In spite of this, there are nearly 13,000 individuals that declare bankruptcy each year in Australia. It’s uncanny how fast people can go from enjoying a healthy financial position to grappling a mountain of debt. In many cases, events like loss of employment, divorce, or sudden medical expenses will trigger serious financial complications within just a couple of months. As opposed to wrestling with these debts for years and ignoring the elephant in the room, it’s far better to cut your losses and seek financial support immediately.
Not long ago, the Australian Government proposed changes to bankruptcy laws that decrease the bankruptcy term from three years to 1 year. If this proposal is passed, it will have a powerful impact on the stigma associated with bankruptcy and the financial penalties that bankrupts will face down the road. While most people understand the idea of bankruptcy, lots of folks wouldn’t know where to start if they decided that declaring bankruptcy is the best option for them. To offer 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 decided that bankruptcy is the best choice for you, always talk with a registered bankruptcy trustee before 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. In most 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 complete recovery after you have been discharged.
- Download the forms needed to declare bankruptcy
If you’ve decided that bankruptcy is the best choice for your individual situation, there are two sets of documents that you will need to complete 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).
- Collect your supporting documents.
In almost all bankruptcy proceedings, individuals need to offer evidence that their claims are accurate by supplying various supporting documents. Typically, this will include the following:
- Income statements and personal tax returns
- Company tax returns (if you are a company 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 paramount to note that failing to supply accurate information or any attempt to conceal information that would otherwise be relevant to your bankruptcy proceedings is a severe offence that is punishable in a criminal court.
- Complete the bankruptcy paperwork.
You must answer each question in your bankruptcy paperwork accurately and truthfully to make sure it gets processed properly. It is crucial that you include the address details of all your creditors in the secured and unsecured sections of the bankruptcy paperwork. In the Debtor’s Petition, you’ll need to present a minimum of 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 don’t have enough space when answering any questions, simply print out another copy of the same page and use it to fill out further details. 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 make sure you are submitting it within 28 days of you signing it. At Bankruptcy Advice Adelaide, we understand that all the paperwork can be a bit frustrating, so if you have any questions regarding your any of your answers, it’s best to phone us on 1300 879 867 to ensure you get it right the first time. Alternatively, visit our website for further information: www.bankruptcy-advice.com.au/Adelaide.