Many Australian’s have only honestly thought about bankruptcy when playing a game of Monopoly with their buddies! Despite this, there are roughly 13,000 people that file for bankruptcy yearly in Australia. It’s extraordinary how quickly individuals can go from experiencing a balanced financial position to facing a mountain of debt. Usually, situations such as loss of employment, divorce, or sudden medical expenses will spark serious financial problems within just a couple of months. Instead 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 immediately.

A short time ago, the Australian Government proposed changes to bankruptcy laws that reduce the bankruptcy duration from three years to 1 year. If this bill is passed, it will have a significant impact on the stigma associated with bankruptcy and the financial repercussions that bankrupts will experience down the road. Although many people understand the idea of bankruptcy, lots of 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 advice from a registered bankruptcy trustee

If you’ve made up your mind that bankruptcy is the best alternative for you, always talk to a registered bankruptcy trustee before making any concrete decisions. There is a vast difference between a firm that charges you to declare bankruptcy and a legitimately 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 aid 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 come to the conclusion that bankruptcy is the best solution for your individual circumstances, there are two sets of documents that you will need to complete for you to declare bankruptcy:

  • The Debtor’s Petition, which is a 3 page document (visit this site 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).
  1. Compile your supporting documents.

In nearly all bankruptcy proceedings, individuals have to present evidence that their claims are accurate by supplying various 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 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 essential to note that failure to provide accurate information or any effort to conceal information that would otherwise relate to your bankruptcy proceedings 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 integral 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 supply a minimum of 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 responding to any questions, simply print out another copy of that page and use it to fill out additional information. Furthermore, be careful to include all assets sold in the last 5 years in question 33.

  1. Lodge your bankruptcy paperwork.

Before you lodge your bankruptcy paperwork, inspect the date to make sure you are lodging it within 28 days of you signing it. At Bankruptcy Experts Townsville, 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 795 575 to ensure you get it right the first time. Alternatively, visit our website for additional information: www.bankruptcyexpertstownsville.com.au.