The majority of Australian’s have only honestly considered bankruptcy when playing a game of Monopoly with their buddies! In spite of this, there are around 13,000 people that file for bankruptcy every year in Australia. It’s astonishing how fast individuals can go from being in a healthy financial position to tackling a mountain of debt. Commonly, circumstances like loss of income, divorce, or unexpected medical expenditures will result in serious financial challenges within just a few 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 assistance as quickly as possible.
Not long ago, the Australian Government proposed changes to bankruptcy laws that reduce the bankruptcy duration from 3 years to 1 year. If this proposed act is passed, it will have a powerful effect on the stigma connected with bankruptcy and the financial implications that bankrupts will encounter in the future. While many individuals understand the notion of bankruptcy, many people wouldn’t know where to start if they decided that filing for bankruptcy is the best option for them. To provide 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 determined that bankruptcy is the best option for you, always speak to a registered bankruptcy trustee before making any concrete decisions. There is a massive difference between a firm that charges you to declare bankruptcy and a legally registered bankruptcy trustee firm. In many cases, bankruptcy firms are not the same as registered bankruptcy trustee firms, so ensure you get the right advice the first time so you can make the best financial decision. The right advice will not only aid 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 needed to declare bankruptcy
If you’ve made the decision that bankruptcy is the best option for your individual circumstances, 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 (visit this site 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).
- Collect your supporting documents.
In almost all bankruptcy proceedings, individuals have to 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 company owner)
- Centrelink benefits statement (if relevant)
- 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 imperative to note that failing to deliver accurate information or any attempt to conceal information that would otherwise relate to your bankruptcy case is a severe offence that is punishable in a criminal court.
- Complete the bankruptcy paperwork.
You must reply to each question in your bankruptcy paperwork accurately and honestly to ensure it gets processed successfully. It is essential that you include the address information of all your lenders 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 don’t have enough space when addressing any questions, simply print out another copy of the same page and use it to fill in additional information. At the same time, be careful to include all assets sold in the last 5 years in question 33.
- Lodge your bankruptcy paperwork.
Before you lodge your bankruptcy paperwork, inspect the date to ensure you are lodging it within 28 days of you signing it. At Bankruptcy Experts Geraldton, we understand that all the paperwork can be a bit overpowering, so if you have any questions 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 further information: www.bankruptcyexpertsgeraldton.com.au.