The majority of Australian’s have only really considered bankruptcy when playing a game of Monopoly with their buddies! Despite this, there are around 13,000 individuals that file for bankruptcy every year in Australia. It’s astonishing how rapidly individuals can go from enjoying a balanced financial position to facing a mountain of debt. In many cases, unfortunate events like loss of employment, divorce, or unforeseen medical costs will result in serious financial problems within just a few months. Rather than 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 support immediately.
A few months ago, the Australian Government proposed changes to bankruptcy laws that decrease the bankruptcy duration from three years to 1 year. If this proposed act is passed, it will have a powerful effect on the stigma related to bankruptcy and the financial consequences that bankrupts will experience down the road. Even though lots of people understand the principle of bankruptcy, lots of people wouldn’t know where to start if they decided that filing for bankruptcy is the best alternative for them. To offer some insight, here are the top 5 tips on how to file for bankruptcy in Australia.
- Seek advice from a registered bankruptcy trustee
If you’ve determined that bankruptcy is the best approach for you, always talk with a registered bankruptcy trustee before making any concrete decisions. There is a vast difference between a firm that charges you to file for bankruptcy and a legally registered bankruptcy trustee firm. In many 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 aid 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 option for your individual scenario, there are two sets of documents that you will need to complete 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 (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 must provide evidence that their claims are correct by supplying numerous supporting documents. Typically, this will include the following:
- Income statements and personal tax returns
- Company tax returns (if you are a company 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 failure to provide accurate information or any effort to hide information that would otherwise be relevant to your bankruptcy case is a severe offence that is punishable in a criminal court.
- Complete the bankruptcy paperwork.
You must reply to each and every question in your bankruptcy paperwork accurately and truthfully to ensure it gets processed properly. It is essential 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 supply a minimum of two types of ID. If you’re not sure of which forms of ID are acceptable, check the AFSA website (https://www.afsa.gov.au). If you don’t have enough space when addressing any questions, simply print out another copy of the same 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, check the date to make sure you are lodging it within 28 days of you signing it. At Bankruptcy Experts Albury, we understand that all the paperwork can be a bit overpowering, so if you have any concerns 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 further information: www.bankruptcyexpertsalbury.com.au.