Most Australian’s have only really contemplated bankruptcy when playing a game of Monopoly with their friends! In spite of this, there are approximately 13,000 people that file for bankruptcy every year in Australia. It’s astonishing how rapidly individuals can go from experiencing a healthy financial position to tackling a mountain of debt. Generally, circumstances such as loss of employment, divorce, or unanticipated medical expenditures will cause serious financial complications within just a few months. Instead 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 immediately.
Not long ago, the Australian Government proposed changes to bankruptcy laws that cut down the bankruptcy time frame from three years to 1 year. If this bill is passed, it will have a significant effect on the stigma connected with bankruptcy and the financial repercussions that bankrupts will face down the road. Even though lots of individuals understand the notion of bankruptcy, lots of people wouldn’t know where to start if they determined that filing for 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 determined that bankruptcy is the best alternative for you, always talk with a registered bankruptcy trustee prior to making any concrete decisions. There is an enormous difference between a firm that charges you to file for bankruptcy and a legally registered bankruptcy trustee firm. Most of the time, 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 healthy recovery after you have been discharged.
Download the forms needed to file for bankruptcy
If you’ve come to the conclusion that bankruptcy is the best choice for your individual circumstances, 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 (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 (visit this site 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 present evidence that their claims are correct by supplying various 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 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 conceal information that would otherwise relate to your bankruptcy case is a serious offence that is punishable in a criminal court.
Complete the bankruptcy paperwork
You must address each question in your bankruptcy paperwork accurately and honestly to ensure it gets processed correctly. It is integral 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 unsure 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 out additional information. Furthermore, 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 lodging it within 28 days of you signing it. At Bankruptcy Experts Tweed Coast, we understand that all the paperwork can be a bit complicated, so if you have any concerns regarding your any of your answers, it’s best to call us on 1300 795 575 to ensure you get it right the first time. Alternatively, visit our website for further information: Declaring Bankruptcy Tweed Coast