Top 5 Tips on How to Declare Bankruptcy in Australia
Most Australian’s have only seriously contemplated bankruptcy when playing a game of Monopoly with their mates! In spite of this, there are close to 13,000 individuals that file for bankruptcy yearly in Australia. It’s astounding how fast people can go from enjoying a balanced financial position to confronting a mountain of debt. Generally, situations like loss of employment, divorce, or unanticipated medical expenses will result in serious financial complications within just a few months. As opposed to 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 immediately.
A short time ago, the Australian Government proposed changes to bankruptcy laws that decrease the bankruptcy term from 3 years to 1 year. If this proposal is passed, it will have a powerful effect on the stigma connected with bankruptcy and the financial consequences that bankrupts will encounter in the future. Even though many people understand the concept of bankruptcy, lots of individuals wouldn’t know where to start if they determined that filing for bankruptcy is the best solution for them. To give 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 determined that bankruptcy is the best solution for you, always talk with a registered bankruptcy trustee before making any concrete decisions. There is a massive difference between a firm that charges you to file for bankruptcy and a legitimately registered bankruptcy trustee firm. In many 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 come to the conclusion that bankruptcy is the best choice for your individual situation, there are two sets of documents that you will need to complete in order 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 here 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 present evidence that their claims are accurate 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 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 integral to note that failing to supply accurate information or any attempt to hide 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 address every question in your bankruptcy paperwork accurately and honestly to ensure it gets processed correctly. It is vital 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 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 that page and use it to fill in extra details. Moreover, be careful to include all assets sold in the last 5 years in question 33.
- Submit 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 Wollongong, we understand that all the paperwork can be a bit confusing, so if you have any concerns 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 further information: www.bankruptcyexpertswollongong.com.au.