Top 5 Tips on How to Declare Bankruptcy in Australia

Many Australian’s have only really contemplated bankruptcy when playing a game of Monopoly with their friends! Despite this, there are roughly 13,000 people that declare bankruptcy each year in Australia. It’s astonishing how fast individuals can go from enjoying a balanced financial position to tackling a mountain of debt. In most cases, situations like loss of employment, divorce, or sudden medical expenses will induce serious financial issues within just a few months. In lieu of 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 help as quickly as possible.

Recently, the Australian Government proposed changes to bankruptcy laws that lower the bankruptcy period from 3 years to 1 year. If this proposed act is passed, it will have a remarkable impact on the stigma linked with bankruptcy and the financial consequences that bankrupts will experience in the future. Although many individuals understand the idea of bankruptcy, lots of people 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 advice from a registered bankruptcy trustee

If you’ve decided that bankruptcy is the best option for you, always seek advice from 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 legitimately 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 help you with your decision-making, but also put you in the best position to make a full recovery after you have been discharged.

2. Download the forms required to file for bankruptcy

If you’ve come to the conclusion that bankruptcy is the best alternative for your individual situation, 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 (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 (visit this site to download: https://www.afsa.gov.au/insolvency/how-we-can-help/forms-list/statement-affairs).

3. Gather your supporting documents.

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

•  Income statements and personal tax returns
•  Company tax returns (if you are a business owner)
•  Centrelink benefits statement (if relevant)
•  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 failure to deliver accurate information or any effort to hide information that would normally be relevant to your bankruptcy proceedings is a serious offence that is punishable in a criminal court.

4. Complete the bankruptcy paperwork.

You must address each and every question in your bankruptcy paperwork accurately and truthfully to make sure 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 present a minimum of two types of ID. If you’re not sure of which forms of ID are accepted, 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 the same page and use it to fill in extra details. In addition, be careful to include all assets sold in the last 5 years in question 33.

5. Lodge your bankruptcy paperwork.

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