Many Australian’s have only really contemplated bankruptcy when playing a game of Monopoly with their friends! Despite this, there are around 13,000 people that file for bankruptcy each year in Australia. It’s astonishing how quickly individuals can go from experiencing a balanced financial position to grappling a mountain of debt. In most cases, events such as loss of employment, divorce, or unplanned medical expenses will spark serious financial complications within just a couple of months. In lieu 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 help as soon as possible.
A short time ago, the Australian Government proposed changes to bankruptcy laws that reduce the bankruptcy time frame from three years to 1 year. If this bill is passed, it will have a powerful effect on the stigma linked with bankruptcy and the financial implications that bankrupts will experience in the future. While lots of individuals understand the idea of bankruptcy, lots of folks wouldn’t know where to start if they decided that declaring bankruptcy is the best solution for them. To offer 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 made up your mind that bankruptcy is the best solution for you, always talk to a registered bankruptcy trustee before making any concrete decisions. There is a tremendous difference between a firm that charges you to file for 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 assist you with your decision-making, but also put you in the best position to make a full recovery after you have been discharged.
- Download the forms required to file for bankruptcy
If you’ve made the decision that bankruptcy is the best decision for your individual scenario, there are two sets of documents that you will need to complete in order to file for 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 on this link to download: https://www.afsa.gov.au/insolvency/how-we-can-help/forms-list/statement-affairs).
- Compile your supporting documents.
In almost all bankruptcy cases, individuals have to offer evidence that their claims are correct by supplying numerous supporting documents. Usually, 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 very important to note that failing to provide accurate information or any effort 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 reply to every question in your bankruptcy paperwork accurately and truthfully to ensure it gets processed successfully. 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 present at the very least two types of ID. If you’re unsure 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 that page and use it to fill in additional details. At the same time, 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 ensure you are submitting it within 28 days of you signing it. At Bankruptcy Advice Perth, 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 879 867 to ensure you get it right the first time. Alternatively, visit our website for additional information: www.bankruptcy-advice.com.au/perth.