The majority of Australian’s have only honestly thought about bankruptcy when playing a game of Monopoly with their buddies! In spite of this, there are an estimated 13,000 people that file for bankruptcy every year in Australia. It’s uncanny how rapidly people can go from enjoying a healthy financial position to dealing with a mountain of debt. Commonly, events such as loss of employment, divorce, or unanticipated medical expenses will result in serious financial issues within just a couple of months. Instead of 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 guidance immediately.
In recent months, the Australian Government proposed changes to bankruptcy laws that lower the bankruptcy time frame from three years to 1 year. If this proposal is passed, it will have a dramatic effect on the stigma related to bankruptcy and the financial penalties that bankrupts will experience down the road. Even though lots of people understand the principle of bankruptcy, lots of folks wouldn’t know where to start if they determined that filing for bankruptcy is the best solution for them. To provide some insight, here are the top 5 tips on how to file for bankruptcy in Australia.
- Seek guidance from a registered bankruptcy trustee
If you’ve decided that bankruptcy is the best approach for you, always talk to a registered bankruptcy trustee before 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. In most cases, 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 assist 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 required to file for bankruptcy
If you’ve decided 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 (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 must offer evidence that their claims are accurate by supplying numerous 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 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 integral to note that failing to supply accurate information or any attempt to hide information that would normally 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 and every question in your bankruptcy paperwork accurately and truthfully to ensure it gets processed properly. It is crucial 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 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 run out of space when responding to any questions, simply print out another copy of that page and use it to fill out further details. Moreover, 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 lodging it within 28 days of you signing it. At Bankruptcy Advice, 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 contact 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/.