Most Australian’s have only really thought about bankruptcy when playing a game of Monopoly with their mates! Despite this, there are nearly 13,000 people that declare bankruptcy each year in Australia. It’s astounding how quickly people can go from enjoying a balanced financial position to tackling a mountain of debt. Commonly, situations such as loss of work, divorce, or unanticipated medical expenditures will cause serious financial problems within just a few months. As opposed to wrestling with these debts for years and ignoring the elephant in the room, it’s far better to cut your losses and seek financial support as soon as possible.
A few months ago, the Australian Government proposed changes to bankruptcy laws that decrease the bankruptcy duration from 3 years to 1 year. If this bill is passed, it will have a remarkable effect on the stigma linked with bankruptcy and the financial consequences that bankrupts will encounter in the future. Even though many individuals understand the concept of bankruptcy, lots of folks wouldn’t know where to start if they decided that filing for bankruptcy is the best solution for them. To offer 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 choice for you, always speak to a registered bankruptcy trustee prior to making any concrete decisions. There is a vast difference between a firm that charges you to file for bankruptcy and a legitimately registered bankruptcy trustee firm. In many 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 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 required to declare bankruptcy
If you’ve come to the conclusion that bankruptcy is the best choice for your individual position, 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 here 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 proceedings, individuals need to present evidence that their claims are correct by supplying various supporting documents. Normally, 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 integral to note that failure to supply accurate information or any attempt to conceal information that would otherwise relate to your bankruptcy proceedings is a severe 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 make sure it gets processed properly. It is vital that you include the address details of all your lenders 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 responding to any questions, simply print out another copy of the same page and use it to fill in additional information. In addition, 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 Darwin, we understand that all the paperwork can be a bit overwhelming, so if you have any inquiries regarding your any of your answers, it’s best to give us a ring on 1300 795 575 to ensure you get it right the first time. Alternatively, visit our website for more information: Bankrupt Darwin