Many Australian’s have only honestly contemplated bankruptcy when playing a game of Monopoly with their mates! Despite this, there are somewhere around 13,000 individuals that file for bankruptcy each year in Australia. It’s astounding how quickly people can go from experiencing a healthy financial position to grappling a mountain of debt. Generally, unfortunate events like loss of income, divorce, or sudden medical expenditures will trigger serious financial problems within just a couple of months. Instead of wrestling with these debts for several years and ignoring the elephant in the room, it’s far better to cut your losses and seek financial guidance as soon as possible.
Not long ago, the Australian Government proposed changes to bankruptcy laws that cut down the bankruptcy time frame from 3 years to 1 year. If this bill is passed, it will have a remarkable impact on the stigma linked to bankruptcy and the financial penalties that bankrupts will encounter in the future. Although lots of folks understand the idea of bankruptcy, most people wouldn’t know where to start if they determined that declaring bankruptcy is the best solution for them. To provide some insight, here are the top 5 tips on how to declare bankruptcy in Australia.
- Seek advice from a registered bankruptcy trustee
If you’ve made up your mind that bankruptcy is the best approach for you, always consult with a registered bankruptcy trustee prior to 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 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 aid 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 declare bankruptcy
If you’ve decided that bankruptcy is the best alternative for your individual scenario, there are two sets of documents that you will need to complete 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).
- Gather your supporting documents.
In almost all bankruptcy cases, individuals need to provide evidence that their claims are correct by supplying various supporting documents. Usually, this will include the following:.
- Income statements and personal tax returns
- Company tax returns (if you are a business 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 essential to note that failure to deliver accurate information or any effort to conceal information that would otherwise be relevant to your bankruptcy case is a serious offence that is punishable in a criminal court.
- Complete the bankruptcy paperwork.
You must reply to each and every question in your bankruptcy paperwork accurately and honestly to ensure it gets processed successfully. It is paramount 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 a minimum of two types of ID. If you’re uncertain of which forms of ID are accepted, 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 the same page and use it to fill out further 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 make sure you are lodging it within 28 days of you signing it. At Bankruptcy Experts Lismore, we understand that all the paperwork can be a bit complicated, so if you have any concerns regarding your any of your answers, it’s best to contact us on 1300 795 575 to ensure you get it right the first time. Alternatively, visit our website for further information: www.bankruptcyexpertslismore.com.au.