Top 5 Tips on How to File For Bankruptcy in Australia
Most Australian’s have only truly thought about bankruptcy when playing a game of Monopoly with their buddies! In spite of this, there are approximately 13,000 people that declare bankruptcy every year in Australia. It’s uncanny how fast individuals can go from being in a balanced financial position to facing a mountain of debt. Usually, situations such as loss of work, divorce, or unforeseen medical expenditures will induce serious financial problems within just a couple of 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 few months ago, the Australian Government proposed changes to bankruptcy laws that cut down the bankruptcy time frame from 3 years to 1 year. If this proposal is passed, it will have a dramatic impact on the stigma linked with bankruptcy and the financial consequences that bankrupts will experience in the future. While many individuals understand the concept of bankruptcy, most people wouldn’t know where to start if they decided that declaring bankruptcy is the best solution for them. To offer 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 solution for you, always talk to 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 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 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 declare bankruptcy
If you’ve come to the conclusion that bankruptcy is the best solution for your individual scenario, 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).
- Gather your supporting documents.
In almost all bankruptcy cases, individuals need to present evidence that their claims are correct by supplying an assortment of supporting documents. Usually, 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 paramount to note that failing to deliver accurate information or any attempt to hide information that would normally relate to your bankruptcy case is a severe offence that is punishable in a criminal court.
- Complete the bankruptcy paperwork.
You must answer every question in your bankruptcy paperwork accurately and truthfully to make sure it gets processed correctly. It is integral that you include the address information of all your creditors 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 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 the same page and use it to fill in extra information. Furthermore, be careful to include all assets sold in the last 5 years in question 33.
- Lodge your bankruptcy paperwork.
Before you lodge your bankruptcy paperwork, check the date to ensure you are lodging it within 28 days of you signing it. At Bankruptcy Experts Sydney, we understand that all the paperwork can be a bit difficult, so if you have any concerns 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 additional information: Insolvency Sydney