Top 5 Tips on How to Declare Bankruptcy in Australia

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Most Australian’s have only seriously thought about bankruptcy when playing a game of Monopoly with their friends! In spite of this, there are an estimated 13,000 individuals that file for bankruptcy yearly in Australia. It’s incredible how easily individuals can go from enjoying a healthy financial position to dealing with a mountain of debt. In most cases, situations such as loss of income, divorce, or unanticipated medical costs will spark serious financial complications within just a couple of months. As opposed to 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 immediately.

In recent months, the Australian Government proposed changes to bankruptcy laws that reduce the bankruptcy time frame from 3 years to 1 year. If this proposed act is passed, it will have a powerful impact on the stigma linked to bankruptcy and the financial penalties that bankrupts will experience down the road. Even though lots of folks understand the notion of bankruptcy, most 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 file for bankruptcy in Australia.

  1. Seek guidance from a registered bankruptcy trustee

If you’ve decided that bankruptcy is the best choice 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 be sure 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 healthy recovery after you have been discharged.

  1. Download the forms needed to file for bankruptcy

If you’ve come to the conclusion that bankruptcy is the best choice for your individual position, there are two sets of documents that you will need to complete if you want 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 on this link to download: https://www.afsa.gov.au/insolvency/how-we-can-help/forms-list/statement-affairs).
  1. Compile your supporting documents.

In nearly all bankruptcy proceedings, individuals have to offer evidence that their claims are correct by supplying various supporting documents. Normally, this will include the following:

  •  Income statements and personal tax returns
  •  Company tax returns (if you are a company 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 case is a serious offence that is punishable in a criminal court.

  1. Complete the bankruptcy paperwork.

You must address every question in your bankruptcy paperwork accurately and truthfully to ensure it gets processed effectively. It’s important 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 present at the very least two types of ID. If you’re uncertain of which forms of ID are acceptable, check the AFSA website (https://www.afsa.gov.au). If you don’t have enough space when answering any questions, simply print out another copy of that page and use it to fill in further information. Additionally, be careful to include all assets sold in the last 5 years in question 33.

  1. Lodge your bankruptcy paperwork.

Before you submit your bankruptcy paperwork, inspect the date to ensure you are submitting it within 28 days of you signing it. At Bankruptcy Experts Penrith, we understand that all the paperwork can be a bit complicated, so if you have any concerns 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 more information: www.bankruptcyexpertspenrith.com.au.

 

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