Many Australian’s have only really thought about bankruptcy when playing a game of Monopoly with their buddies! Despite this, there are about 13,000 people that declare bankruptcy every year in Australia. It’s astonishing how quickly individuals can go from enjoying a healthy financial position to tackling a mountain of debt. In many cases, events like loss of income, divorce, or unexpected medical expenses will cause serious financial challenges within just a few months. As opposed to wrestling with these debts for several years and ignoring the elephant in the room, it’s far better to cut your losses and seek financial guidance immediately.
Not long ago, the Australian Government proposed changes to bankruptcy laws that reduce the bankruptcy period from three years to 1 year. If this bill is passed, it will have a powerful impact on the stigma connected with bankruptcy and the financial repercussions that bankrupts will experience down the road. Even though lots of people understand the principle of bankruptcy, most individuals wouldn’t know where to start if they decided that declaring bankruptcy is the best solution for them. To give some insight, here are the top 5 tips on how to declare bankruptcy in Australia.
- Get advice from a registered bankruptcy trustee
If you’ve decided that bankruptcy is the best solution for you, always talk with a registered bankruptcy trustee prior to making any concrete decisions. There is a massive 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 be 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 alternative for your individual situation, 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).
- Compile your supporting documents.
In nearly all bankruptcy proceedings, individuals have to provide 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 crucial to note that failing to provide accurate information or any effort to hide information that would normally relate to your bankruptcy proceedings is a severe 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 successfully. 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 supply at least two types of ID. If you’re not sure 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 that page and use it to fill in additional information. Moreover, be careful to include all assets sold in the last 5 years in question 33.
- Submit your bankruptcy paperwork.
Before you lodge your bankruptcy paperwork, inspect the date to ensure you are lodging it within 28 days of you signing it. At Bankruptcy Experts Wyong, we understand that all the paperwork can be a bit frustrating, so if you have any inquiries regarding your any of your answers, it’s best to give us a call on 1300 795 575 to ensure you get it right the first time. Alternatively, visit our website for further information: www.bankruptcyexpertswyong.com.au.