Most Australian’s have only seriously contemplated bankruptcy when playing a game of Monopoly with their buddies! In spite of this, there are close to 13,000 individuals that file for bankruptcy yearly in Australia. It’s uncanny how fast people can go from experiencing a balanced financial position to dealing with a mountain of debt. Typically, unfortunate events such as loss of income, divorce, or unanticipated medical costs will trigger serious financial issues within just a few months. Instead of wrestling with these debts for years and ignoring the elephant in the room, it’s far better to cut your losses and seek financial guidance as quickly as possible.
In recent months, the Australian Government proposed changes to bankruptcy laws that lower the bankruptcy duration from 3 years to 1 year. If this bill is passed, it will have a significant impact on the stigma linked with bankruptcy and the financial consequences that bankrupts will experience in the future. While many individuals understand the notion of bankruptcy, most individuals wouldn’t know where to start if they decided 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 made up your mind that bankruptcy is the best choice for you, always seek guidance from a registered bankruptcy trustee prior to making any concrete decisions. There is a tremendous difference between a firm that charges you to declare bankruptcy and a legally registered bankruptcy trustee firm. In many 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 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 required to file for bankruptcy
If you’ve decided that bankruptcy is the best solution 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 (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).
- Gather your supporting documents.
In nearly all bankruptcy proceedings, individuals must offer evidence that their claims are accurate by supplying an assortment of supporting documents. Normally, 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 is very important to note that failure to provide accurate information or any attempt to hide information that would normally be relevant to your bankruptcy case is a serious offence that is punishable in a criminal court.
- Complete the bankruptcy paperwork.
You must respond to each question in your bankruptcy paperwork accurately and honestly to make sure it gets processed correctly. It is paramount 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 present a minimum of 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 don’t have enough space when responding to any questions, simply print out another copy of the same page and use it to fill in further details. Moreover, be careful to include all assets sold in the last 5 years in question 33.
- Lodge your bankruptcy paperwork.
Before you submit your bankruptcy paperwork, inspect the date to make sure you are submitting it within 28 days of you signing it. At Bankruptcy Experts Adelaide, we understand that all the paperwork can be a bit over-bearing, 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 further information: www.bankruptcyexpertsadelaide.com.au.