June 27, 2018 0

Top 5 Tips on How to Declare Bankruptcy in Australia

Posted by:Charles Bosse onJune 27, 2018

Many Australian’s have only seriously considered bankruptcy when playing a game of Monopoly with their buddies! In spite of this, there are somewhere around 13,000 individuals that declare bankruptcy every year in Australia. It’s incredible how rapidly people can go from enjoying a balanced financial position to tackling a mountain of debt. Commonly, unfortunate events such as loss of income, divorce, or sudden medical costs will lead to serious financial problems within just a few months. Rather than wrestling with these debts for several years and ignoring the elephant in the room, it’s much better to cut your losses and seek financial support as quickly as possible.

A short time ago, the Australian Government proposed changes to bankruptcy laws that lower the bankruptcy duration from 3 years to 1 year. If this bill is passed, it will have a powerful impact on the stigma linked to bankruptcy and the financial consequences that bankrupts will experience in the future. Even though lots of people understand the principle of bankruptcy, lots of individuals wouldn’t know where to start if they decided 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. Seek guidance from a registered bankruptcy trustee

If you’ve decided that bankruptcy is the best choice for you, always speak with a registered bankruptcy trustee prior to making any concrete decisions. There is a tremendous difference between a firm that charges you to file for bankruptcy and a legally registered bankruptcy trustee firm. Most of the time, 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 complete recovery after you have been discharged.

  1. Download the forms required to declare bankruptcy

If you’ve made the decision that bankruptcy is the best solution for your individual situation, there are two sets of documents that you will need to complete 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. Gather your supporting documents.

In almost all bankruptcy proceedings, individuals must offer evidence that their claims are correct by supplying a variety 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 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 is crucial to note that failing to deliver accurate information or any effort 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 answer each and every question in your bankruptcy paperwork accurately and honestly to ensure 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 at least 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 run out of space when addressing any questions, simply print out another copy of that 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.

  1. Lodge your bankruptcy paperwork.

Before you submit your bankruptcy paperwork, inspect the date to make sure you are submitting it within 28 days of you signing it. At Fresh Start Solutions Darwin, 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 818 575 to ensure you get it right the first time. Alternatively, visit our website for further information: https://freshstartsolutions.com.au/bankruptcy-darwin.

 

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