Most Australian’s have only truly contemplated bankruptcy when playing a game of Monopoly with their friends! In spite of this, there are close to 13,000 people that declare bankruptcy yearly in Australia. It’s extraordinary how easily people can go from enjoying a healthy financial position to tackling a mountain of debt. In most cases, events such as loss of employment, divorce, or unanticipated medical expenditures will lead to serious financial problems within just a few months. In lieu of wrestling with these debts for years and ignoring the elephant in the room, it’s much better to cut your losses and seek financial help as soon as possible.
A short time ago, the Australian Government proposed changes to bankruptcy laws that cut down the bankruptcy period from 3 years to 1 year. If this proposed act is passed, it will have a remarkable impact on the stigma linked with bankruptcy and the financial penalties that bankrupts will face down the road. While most people understand the concept of bankruptcy, many people wouldn’t know where to start if they decided that filing for bankruptcy is the best option for them. To offer some insight, here are the top 5 tips on how to file for bankruptcy in Australia.
- Get advice from a registered bankruptcy trustee
If you’ve made up your mind that bankruptcy is the best option for you, always speak to a registered bankruptcy trustee before making any concrete decisions. There is an enormous difference between a firm that charges you to file for bankruptcy and a legally registered bankruptcy trustee firm. Most of the time, 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 assist 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 declare bankruptcy
If you’ve made the decision that bankruptcy is the best choice for your individual circumstances, 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 (click here 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 (visit this site to download: https://www.afsa.gov.au/insolvency/how-we-can-help/forms-list/statement-affairs).
- Collect your supporting documents.
In almost all bankruptcy cases, individuals must offer evidence that their claims are accurate by supplying various supporting documents. Typically, this will include the following:.
- Income statements and personal tax returns
- Company tax returns (if you are a company owner)
- Centrelink benefits statement (if appropriate)
- 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 imperative to note that failure to supply accurate information or any attempt to hide information that would normally be relevant to your bankruptcy proceedings is a severe 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 truthfully to make sure it gets processed successfully. It is integral 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 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 don’t have enough space when answering any questions, simply print out another copy of the same page and use it to fill out extra details. In addition, be careful to include all assets sold in the last 5 years in question 33.
- Submit your bankruptcy paperwork.
Before you submit your bankruptcy paperwork, check the date to make sure you are lodging it within 28 days of you signing it. At Bankruptcy Experts Mackay, 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 phone us on 1300 795 575 to ensure you get it right the first time. Alternatively, visit our website for more information: www.bankruptcyexpertsmackay.com.au.