Most Australian’s have only honestly considered bankruptcy when playing a game of Monopoly with their friends! Despite this, there are about 13,000 individuals that declare bankruptcy yearly in Australia. It’s astounding how quickly people can go from being in a balanced financial position to dealing with a mountain of debt. In many cases, events like loss of employment, divorce, or sudden medical expenses will result in serious financial issues within just a couple of months. In lieu of 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 immediately.

In recent months, the Australian Government proposed changes to bankruptcy laws that lower the bankruptcy time frame from three years to 1 year. If this bill is passed, it will have a powerful effect on the stigma linked with bankruptcy and the financial consequences that bankrupts will encounter in the future. While lots of folks understand the concept of bankruptcy, most people wouldn’t know where to start if they decided that declaring bankruptcy is the best alternative 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 alternative for you, always talk to a registered bankruptcy trustee prior to making any concrete decisions. There is a massive difference between a firm that charges you to declare 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 assist 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 required to file for bankruptcy

If you’ve come to the conclusion that bankruptcy is the best option for your individual scenario, 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 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 (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 almost all bankruptcy proceedings, individuals must offer evidence that their claims are correct by supplying various supporting documents. Normally, 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 vital to note that failing to provide accurate information or any effort to hide information that would normally be relevant to your bankruptcy case is a severe offence that is punishable in a criminal court.

  1. Complete the bankruptcy paperwork.

You must reply to every question in your bankruptcy paperwork accurately and truthfully to ensure it gets processed successfully. It is very important 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 unsure of which forms of ID are accepted, check the AFSA website (https://www.afsa.gov.au). If you run out of space when answering any questions, simply print out another copy of the same page and use it to fill out further details. 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 Bankruptcy Experts Hervey Bay, we understand that all the paperwork can be a bit frustrating, so if you have any questions regarding your any of your answers, it’s best to give us a call on 1300 795 575 to ensure you get it right the first time. Alternatively, visit our website for further information: www.bankruptcyexpertsherveybay.com.au.