Most Australian’s have only truly contemplated bankruptcy when playing a game of Monopoly with their friends! Despite this, there are an estimated 13,000 individuals that declare bankruptcy each year in Australia. It’s astounding how rapidly individuals can go from experiencing a balanced financial position to confronting a mountain of debt. Typically, situations such as loss of employment, divorce, or sudden medical expenses will generate serious financial challenges within just a few months. Rather than 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 lower the bankruptcy duration from 3 years to 1 year. If this proposed act is passed, it will have a significant effect on the stigma linked with bankruptcy and the financial penalties that bankrupts will experience in the future. Even though lots of people understand the concept of bankruptcy, many people wouldn’t know where to start if they decided that filing for bankruptcy is the best solution for them. To provide some insight, here are the top 5 tips on how to file for bankruptcy in Australia.
- Get advice from a registered bankruptcy trustee
If you’ve decided that bankruptcy is the best alternative for you, always talk with a registered bankruptcy trustee prior to making any concrete decisions. There is a considerable 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 aid 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 come to the conclusion that bankruptcy is the best option 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 (visit this site 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 on this link 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 have to offer evidence that their claims are correct by supplying numerous 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 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’s important to note that failing to deliver accurate information or any attempt to conceal information that would normally relate to your bankruptcy proceedings is a serious offence that is punishable in a criminal court.
- Complete the bankruptcy paperwork.
You must address every question in your bankruptcy paperwork accurately and truthfully to make sure it gets processed properly. It is very important 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 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 responding to any questions, simply print out another copy of that page and use it to fill out further information. 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, check the date to make sure you are submitting it within 28 days of you signing it. At Bankruptcy Experts Hobart, we understand that all the paperwork can be a bit frustrating, so if you have any inquiries 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.bankruptcyexpertshobart.com.au.