Most Australian’s have only truly considered bankruptcy when playing a game of Monopoly with their mates! In spite of this, there are about 13,000 individuals that declare bankruptcy each year in Australia. It’s uncanny how quickly individuals can go from being in a healthy financial position to dealing with a mountain of debt. Usually, unfortunate events like loss of work, divorce, or unplanned medical costs will induce serious financial challenges 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 period from 3 years to 1 year. If this proposal is passed, it will have a dramatic impact on the stigma linked to bankruptcy and the financial repercussions that bankrupts will face in the future. Although many individuals understand the principle of bankruptcy, lots of people wouldn’t know where to start if they decided that filing for bankruptcy is the best solution for them. To give some insight, here are the top 5 tips on how to file for bankruptcy in Australia.
- Seek advice from a registered bankruptcy trustee
If you’ve decided that bankruptcy is the best approach for you, always seek guidance from a registered bankruptcy trustee before 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. 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 assist 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 needed to declare bankruptcy
If you’ve come to the conclusion that bankruptcy is the best alternative for your individual circumstances, 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 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 (click here to download: https://www.afsa.gov.au/insolvency/how-we-can-help/forms-list/statement-affairs).
- Collect your supporting documents.
In nearly all bankruptcy cases, individuals must present evidence that their claims are correct by supplying an assortment of 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 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 essential to note that failure to supply accurate information or any attempt to hide information that would otherwise relate to your bankruptcy proceedings is a serious offence that is punishable in a criminal court.
- Complete the bankruptcy paperwork.
You must answer every question in your bankruptcy paperwork accurately and honestly to make sure it gets processed correctly. It is vital 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 not sure 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 the same page and use it to fill out additional details. Also, 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 Cairns, 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.bankruptcyexpertscairns.com.au.