The majority of Australian’s have only honestly considered bankruptcy when playing a game of Monopoly with their friends! In spite of this, there are around 13,000 individuals that declare bankruptcy each year in Australia. It’s uncanny how easily individuals can go from enjoying a healthy financial position to tackling a mountain of debt. Generally, unfortunate events such as loss of income, divorce, or unplanned medical expenses will generate serious financial issues within just a couple of months. Rather than wrestling with these debts for many years and ignoring the elephant in the room, it’s far better to cut your losses and seek financial support immediately.
In recent months, the Australian Government proposed changes to bankruptcy laws that reduce the bankruptcy time frame from three years to 1 year. If this proposed act is passed, it will have a significant effect on the stigma associated with bankruptcy and the financial penalties that bankrupts will encounter down the road. While lots of folks understand the notion of bankruptcy, most people wouldn’t know where to start if they determined that filing for 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 advice from a registered bankruptcy trustee
If you’ve decided that bankruptcy is the best choice for you, always seek advice from 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 legitimately registered bankruptcy trustee firm. In many 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 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 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 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 almost all bankruptcy proceedings, individuals need to provide evidence that their claims are accurate by supplying various 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 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 very important to note that failing to deliver 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 respond to every question in your bankruptcy paperwork accurately and honestly to make sure it gets processed effectively. It’s important 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 least two types of ID. If you’re unsure of which forms of ID are accepted, check the AFSA website (https://www.afsa.gov.au). If you run out of space when answering any questions, simply print out another copy of the same page and use it to fill in additional details. In addition, 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, check the date to ensure you are submitting it within 28 days of you signing it. At Bankruptcy Experts Rockingham, we understand that all the paperwork can be a bit overwhelming, so if you have any concerns regarding your any of your answers, it’s best to phone us on 1300 795 575 to ensure you get it right the first time. Alternatively, visit our website for more information: www.bankruptcyexpertsrockingham.com.au.