The majority of Australian’s have only honestly thought about bankruptcy when playing a game of Monopoly with their buddies! In spite of this, there are around 13,000 people that file for bankruptcy each year in Australia. It’s astonishing how fast individuals can go from enjoying a balanced financial position to grappling 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 guidance as soon as possible.
A short time ago, the Australian Government proposed changes to bankruptcy laws that reduce the bankruptcy term from 3 years to 1 year. If this bill is passed, it will have a remarkable effect on the stigma related to bankruptcy and the financial consequences that bankrupts will experience in the future. Although lots of individuals understand the idea of bankruptcy, many people wouldn’t know where to start if they decided that declaring bankruptcy is the best option for them. To provide some insight, here are the top 5 tips on how to declare bankruptcy in Australia.
- Get guidance from a registered bankruptcy trustee
If you’ve determined that bankruptcy is the best option for you, always consult with a registered bankruptcy trustee before making any concrete decisions. There is a considerable difference between a firm that charges you to declare 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 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 solution for your individual scenario, there are two sets of documents that you will need to complete in order to file for 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 cases, individuals must offer evidence that their claims are accurate 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 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’s important to note that failing to provide 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 address every question in your bankruptcy paperwork accurately and truthfully to ensure it gets processed effectively. It is imperative that you include the address details of all your creditors in the secured and unsecured sections of the bankruptcy paperwork. In the Debtor’s Petition, you’ll need to present at least two types of ID. If you’re unsure 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 additional information. Additionally, 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, check the date to ensure you are submitting it within 28 days of you signing it. At Bankruptcy Wagga Wagga, we understand that all the paperwork can be a bit difficult, so if you have any inquiries regarding your any of your answers, it’s best to phone us on 1300 818 575 to ensure you get it right the first time. Alternatively, visit our website for additional information: http://www.bankruptcy-waggawagga.com.au/.