June 27, 2018 0

Top 5 Tips on How to Declare Bankruptcy in Australia

Posted by:Charles Bosse onJune 27, 2018

Most Australian’s have only honestly thought about bankruptcy when playing a game of Monopoly with their friends! In spite of this, there are about 13,000 people that declare bankruptcy every year in Australia. It’s astonishing how fast people can go from being in a balanced financial position to tackling a mountain of debt. Generally, situations like loss of income, divorce, or sudden medical costs will trigger serious financial challenges within just a couple of months. Rather than wrestling with these debts for several years and ignoring the elephant in the room, it’s far better to cut your losses and seek financial help as quickly as possible.

A few months ago, the Australian Government proposed changes to bankruptcy laws that lower the bankruptcy period from three years to 1 year. If this proposal is passed, it will have a remarkable impact on the stigma linked with bankruptcy and the financial consequences that bankrupts will face down the road. Although lots of individuals understand the principle of bankruptcy, lots of individuals wouldn’t know where to start if they determined that declaring bankruptcy is the best solution for them. To give some insight, here are the top 5 tips on how to declare bankruptcy in Australia.

  1. Get advice from a registered bankruptcy trustee

If you’ve made up your mind that bankruptcy is the best alternative for you, always speak with a registered bankruptcy trustee before making any concrete decisions. There is a significant difference between a firm that charges you to file for bankruptcy and a legitimately registered bankruptcy trustee firm. In most 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 healthy recovery after you have been discharged.

  1. Download the forms needed to file for bankruptcy

If you’ve made the decision that bankruptcy is the best choice for your individual situation, 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 on this link 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 here to download: https://www.afsa.gov.au/insolvency/how-we-can-help/forms-list/statement-affairs).
  1. Compile your supporting documents.

In almost all bankruptcy cases, individuals must present evidence that their claims are correct by supplying a variety of supporting documents. Generally, 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’s important to note that failure to supply accurate information or any attempt to conceal information that would otherwise be relevant to your bankruptcy proceedings is a serious offence that is punishable in a criminal court.

  1. Complete the bankruptcy paperwork.

You must reply to each question in your bankruptcy paperwork accurately and truthfully to make sure it gets processed effectively. It is integral that you include the address details 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 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 run out of space when addressing any questions, simply print out another copy of the same page and use it to fill in extra information. At the same time, be careful to include all assets sold in the last 5 years in question 33.

  1. Submit your bankruptcy paperwork.

Before you lodge your bankruptcy paperwork, check the date to make sure you are lodging it within 28 days of you signing it. At Fresh Start Solutions Sydney, we understand that all the paperwork can be a bit complicated, so if you have any inquiries regarding your any of your answers, it’s best to contact us on 1300 818 575 to ensure you get it right the first time. Alternatively, visit our website for further information: http://freshstartsolutions.com.au/bankruptcy-sydney.

 

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