Most Australian’s have only seriously contemplated bankruptcy when playing a game of Monopoly with their buddies! In spite of this, there are somewhere around 13,000 individuals that declare bankruptcy each year in Australia. It’s uncanny how rapidly people can go from enjoying a balanced financial position to confronting a mountain of debt. Commonly, events such as loss of income, divorce, or unplanned medical costs will cause serious financial complications within just a few months. Rather than wrestling with these debts for years and ignoring the elephant in the room, it’s much better to cut your losses and seek financial support immediately.
A short time ago, the Australian Government proposed changes to bankruptcy laws that reduce the bankruptcy time frame from 3 years to 1 year. If this bill is passed, it will have a dramatic impact on the stigma linked to bankruptcy and the financial repercussions that bankrupts will encounter in the future. Although lots of individuals understand the concept of bankruptcy, lots of people wouldn’t know where to start if they determined that declaring bankruptcy is the best alternative 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 decided that bankruptcy is the best alternative for you, always consult with a registered bankruptcy trustee prior to 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 most 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 help you with your decision-making, but also put you in the best position to make a full recovery after you have been discharged.
- Download the forms needed to file for bankruptcy
If you’ve decided that bankruptcy is the best solution for your individual scenario, 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 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 (click here to download: https://www.afsa.gov.au/insolvency/how-we-can-help/forms-list/statement-affairs).
- Compile your supporting documents.
In almost all bankruptcy proceedings, individuals need to present evidence that their claims are accurate by supplying a variety of supporting documents. Commonly, 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 is paramount to note that failure to supply accurate information or any attempt to conceal information that would otherwise be relevant to your bankruptcy proceedings is a serious offence that is punishable in a criminal court.
- Complete the bankruptcy paperwork.
You must respond to each question in your bankruptcy paperwork accurately and truthfully to ensure it gets processed successfully. It is essential 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 provide 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 run out of space when answering any questions, simply print out another copy of that page and use it to fill in further details. At the same time, 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 make sure you are submitting it within 28 days of you signing it. At Bankruptcy Experts Alice Springs, we understand that all the paperwork can be a bit frustrating, so if you have any questions 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 more information: www.bankruptcyexpertsalicesprings.com.au.