Many Australian’s have only really contemplated bankruptcy when playing a game of Monopoly with their buddies! Despite this, there are roughly 13,000 people that file for bankruptcy every year in Australia. It’s uncanny how fast people can go from being in a balanced financial position to grappling a mountain of debt. Usually, situations like loss of employment, divorce, or unplanned medical expenses will result in serious financial challenges within just a couple of months. Instead of wrestling with these debts for many years and ignoring the elephant in the room, it’s far better to cut your losses and seek financial guidance as soon as possible.
Just recently, the Australian Government proposed changes to bankruptcy laws that decrease the bankruptcy duration from 3 years to 1 year. If this proposal is passed, it will have a powerful impact on the stigma related to bankruptcy and the financial penalties that bankrupts will encounter down the road. Even though many people understand the idea of bankruptcy, lots of individuals 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 declare bankruptcy in Australia.
- Seek guidance from a registered bankruptcy trustee
If you’ve determined that bankruptcy is the best alternative for you, always seek advice from a registered bankruptcy trustee prior to making any concrete decisions. There is a vast difference between a firm that charges you to declare 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 full recovery after you have been discharged.
- Download the forms needed to declare bankruptcy
If you’ve made the decision that bankruptcy is the best option for your individual scenario, there are two sets of documents that you will need to complete in order 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 (visit this site to download: https://www.afsa.gov.au/insolvency/how-we-can-help/forms-list/statement-affairs).
- Gather your supporting documents.
In almost all bankruptcy proceedings, individuals need to provide evidence that their claims are correct by supplying a variety of supporting documents. Usually, 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 crucial to note that failing 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.
- Complete the bankruptcy paperwork.
You must address each and every question in your bankruptcy paperwork accurately and truthfully to ensure it gets processed effectively. It is paramount 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 provide 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 the same page and use it to fill in extra details. Additionally, 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, check the date to make sure you are lodging it within 28 days of you signing it. At Bankruptcy Experts Kalgoorlie, 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 phone us on 1300 795 575 to ensure you get it right the first time. Alternatively, visit our website for further information: www.bankruptcyexpertskalgoorlie.com.au.