Many Australian’s have only honestly considered bankruptcy when playing a game of Monopoly with their mates! In spite of this, there are nearly 13,000 people that declare bankruptcy every year in Australia. It’s astonishing how rapidly people can go from being in a healthy financial position to grappling a mountain of debt. Usually, unfortunate events like loss of work, divorce, or unanticipated medical expenses will spark serious financial problems 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 guidance as soon as possible.
In recent months, the Australian Government proposed changes to bankruptcy laws that reduce the bankruptcy term from three years to 1 year. If this proposed act is passed, it will have a remarkable effect on the stigma connected with bankruptcy and the financial repercussions that bankrupts will encounter down the road. Even though most people understand the concept of bankruptcy, most people wouldn’t know where to start if they determined that declaring bankruptcy is the best alternative for them. To offer some insight, here are the top 5 tips on how to file for bankruptcy in Australia.
1. Get guidance from a registered bankruptcy trustee
If you’ve decided that bankruptcy is the best approach for you, always speak to a registered bankruptcy trustee before making any concrete decisions. There is a significant difference between a firm that charges you to file for 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 complete recovery after you have been discharged.
2. Download the forms needed to file for bankruptcy
If you’ve made the decision that bankruptcy is the best choice for your individual circumstances, there are two sets of documents that you will need to complete if you want to file for 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 here to download: https://www.afsa.gov.au/insolvency/how-we-can-help/forms-list/statement-affairs).
3. Collect your supporting documents.
In almost all bankruptcy proceedings, individuals have to provide evidence that their claims are correct by supplying various supporting documents. Typically, 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 imperative to note that failure to deliver accurate information or any attempt to hide information that would normally be relevant to your bankruptcy proceedings is a serious offence that is punishable in a criminal court.
4. Complete the bankruptcy paperwork.
You must answer each and every question in your bankruptcy paperwork accurately and honestly to make sure it gets processed correctly. It is essential 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 the very 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 answering any questions, simply print out another copy of that page and use it to fill out extra information. At the same time, be careful to include all assets sold in the last 5 years in question 33.
5. Submit your bankruptcy paperwork.
Before you lodge your bankruptcy paperwork, check the date to ensure you are lodging it within 28 days of you signing it. At Gold Coast Bankruptcy Centre, we understand that all the paperwork can be a bit overwhelming, so if you have any concerns regarding your any of your answers, it’s best to phone us on 1300 795 575 to ensure you get it right the first time. Alternatively, visit our website for more information: www.goldcoastbankruptcycentre.com.au.