The majority of Australian’s have only honestly thought about bankruptcy when playing a game of Monopoly with their mates! Despite this, there are approximately 13,000 people that file for bankruptcy every year in Australia. It’s astounding how rapidly people can go from being in a balanced financial position to grappling a mountain of debt. Commonly, situations like loss of work, divorce, or unanticipated medical costs will generate serious financial problems within just a couple of months. Rather than 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 assistance as quickly as possible.
In recent months, the Australian Government proposed changes to bankruptcy laws that lower the bankruptcy time frame from three years to 1 year. If this proposal is passed, it will have a remarkable effect on the stigma linked to bankruptcy and the financial consequences that bankrupts will experience in the future. While lots of people understand the principle of bankruptcy, most people 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 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 speak with a registered bankruptcy trustee prior to making any concrete decisions. There is an enormous difference between a firm that charges you to declare 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 healthy 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 position, there are two sets of documents that you will need to complete 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 nearly all bankruptcy proceedings, individuals have to offer evidence that their claims are accurate by supplying numerous supporting documents. Commonly, this will include the following:
- Income statements and personal tax returns
- Company tax returns (if you are a company 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 imperative to note that failing to deliver accurate information or any effort to conceal information that would normally 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 truthfully to ensure it gets processed successfully. It is crucial that you include the address information of all your creditors 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 unclear of which forms of ID are accepted, check the AFSA website (https://www.afsa.gov.au). If you run out of space when responding to any questions, simply print out another copy of the same page and use it to fill out additional information. Additionally, 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 make sure you are submitting it within 28 days of you signing it. At Bankruptcy Experts Gold Coast, 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 call on 1300 879 867 to ensure you get it right the first time. Alternatively, visit our website for further information: www.bankruptcyexpertsgoldcoast.com.au.