July 11, 2018 Comments Closed

Top 5 Tips on How to Declare Bankruptcy in Australia

Posted by:admin onJuly 11, 2018

Most Australian’s have only really thought about bankruptcy when playing a game of Monopoly with their mates! Despite this, there are close to 13,000 people that declare bankruptcy yearly in Australia. It’s incredible how rapidly people can go from being in a healthy financial position to tackling a mountain of debt. Generally, situations like loss of work, divorce, or unanticipated medical expenditures will trigger serious financial issues within just a few months. Instead of wrestling with these debts for many years and ignoring the elephant in the room, it’s far better to cut your losses and seek financial guidance as quickly as possible.

A few months ago, the Australian Government proposed changes to bankruptcy laws that cut down the bankruptcy term from three years to 1 year. If this proposed act is passed, it will have a powerful effect on the stigma related to bankruptcy and the financial repercussions that bankrupts will experience down the road. While many people understand the idea of bankruptcy, most people wouldn’t know where to start if they determined that filing for bankruptcy is the best solution for them. To give some insight, here are the top 5 tips on how to file for bankruptcy in Australia.

  1. Get guidance from a registered bankruptcy trustee

If you’ve made up your mind that bankruptcy is the best choice for you, always speak with a registered bankruptcy trustee prior to making any concrete decisions. There is a considerable difference between a firm that charges you to declare bankruptcy and a legally registered bankruptcy trustee firm. In many cases, bankruptcy firms are not the same as registered bankruptcy trustee firms, so make 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 decision for your individual scenario, there are two sets of documents that you will need to complete in order to file for 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 on this link to download: https://www.afsa.gov.au/insolvency/how-we-can-help/forms-list/statement-affairs).

 

  1. Collect your supporting documents.

In nearly all bankruptcy cases, individuals must provide evidence that their claims are accurate 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 company 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 imperative to note that failure to provide accurate information or any effort to conceal information that would otherwise be relevant to your bankruptcy case is a severe 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 make sure it gets processed correctly. It is imperative 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 a minimum of two types of ID. If you’re unclear of which forms of ID are acceptable, check the AFSA website (https://www.afsa.gov.au). If you run out of space when responding to any questions, simply print out another copy of that page and use it to fill out extra details. Moreover, 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 submitting it within 28 days of you signing it. At Bankruptcy Experts Mount Isa, 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 ring on 1300 795 575 to ensure you get it right the first time. Alternatively, visit our website for more information: www.bankruptcyexpertsmountisa.com.au.

 

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