Top 5 Tips on How to File For Bankruptcy in Australia
Many Australian’s have only really thought about 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 incredible how fast people can go from being in a healthy financial position to grappling a mountain of debt. Generally, circumstances like loss of work, divorce, or unforeseen medical costs will generate serious financial complications 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 support immediately.
Just recently, the Australian Government proposed changes to bankruptcy laws that cut down the bankruptcy term from 3 years to 1 year. If this proposed act is passed, it will have a dramatic impact on the stigma connected with bankruptcy and the financial implications that bankrupts will encounter down the road. Although most people understand the idea of bankruptcy, lots of people wouldn’t know where to start if they decided that declaring bankruptcy is the best option for them. To provide some insight, here are the top 5 tips on how to declare bankruptcy in Australia.
- Seek guidance from a registered bankruptcy trustee
If you’ve made up your mind that bankruptcy is the best option for you, always talk to a registered bankruptcy trustee prior to making any concrete decisions. There is a significant difference between a firm that charges you to declare bankruptcy and a legitimately registered bankruptcy trustee firm. Most of the time, 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 help 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 made the decision that bankruptcy is the best option for your individual position, 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).
- Compile your supporting documents.
In nearly all bankruptcy cases, individuals need to provide 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 applicable)
- 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 crucial to note that failure to provide accurate information or any effort to conceal information that would normally relate to your bankruptcy case 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 properly. It is very 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 provide at the very least two types of ID. If you’re uncertain of which forms of ID are acceptable, 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 that page and use it to fill out extra information. Furthermore, 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 make sure you are lodging it within 28 days of you signing it. At Bankruptcy Experts Geelong, we understand that all the paperwork can be a bit complicated, so if you have any inquiries regarding your any of your answers, it’s best to give us a ring on 1300 795 575 to ensure you get it right the first time. Alternatively, visit our website for more information: www.bankruptcyexpertsgeelong.com.au.