Many Australian’s have only seriously thought about bankruptcy when playing a game of Monopoly with their mates! Despite this, there are close to 13,000 people that declare bankruptcy yearly in Australia. It’s incredible how fast people can go from experiencing a healthy financial position to tackling a mountain of debt. Usually, circumstances such as loss of employment, divorce, or unplanned medical costs will spark serious financial issues within just a couple of months. In lieu of wrestling with these debts for many years and ignoring the elephant in the room, it’s much better to cut your losses and seek financial support as soon as possible.
In recent months, the Australian Government proposed changes to bankruptcy laws that reduce 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 repercussions that bankrupts will experience down the road. While lots of folks understand the principle of bankruptcy, most individuals wouldn’t know where to start if they determined that declaring bankruptcy is the best option for them. To give 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 decided that bankruptcy is the best approach for you, always talk to a registered bankruptcy trustee before making any concrete decisions. There is a vast difference between a firm that charges you to file for bankruptcy and a legally registered bankruptcy trustee firm. In most 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 help you with your decision-making, but also put you in the best position to make a complete recovery after you have been discharged.
- Download the forms needed to file for bankruptcy
If you’ve come to the conclusion that bankruptcy is the best decision for your individual position, 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 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 must provide evidence that their claims are correct by supplying various supporting documents. Generally, this will include the following:
- Income statements and personal tax returns
- Company tax returns (if you are a business 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’s important to note that failure to provide accurate information or any attempt to conceal information that would otherwise be relevant to your bankruptcy proceedings is a serious offence that is punishable in a criminal court.
- Complete the bankruptcy paperwork.
You must respond to each and every question in your bankruptcy paperwork accurately and honestly to ensure it gets processed effectively. It is imperative that you include the address details of all your creditors in the secured and unsecured sections of the bankruptcy paperwork. In the Debtor’s Petition, you’ll need to supply a minimum of 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 out further details. 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, check the date to ensure you are submitting it within 28 days of you signing it. At Bankruptcy Experts Tennant Creek, we understand that all the paperwork can be a bit frustrating, 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.bankruptcyexpertstennantcreek.com.au.