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Most Australian’s have only seriously thought about bankruptcy when playing a game of Monopoly with their friends! Despite this, there are nearly 13,000 individuals that file for bankruptcy yearly in Australia. It’s incredible how rapidly individuals can go from enjoying a balanced financial position to tackling a mountain of debt. Generally, events such as loss of income, divorce, or unanticipated medical costs will induce serious financial complications within just a few months. As opposed to wrestling with these debts for many years and ignoring the elephant in the room, it’s much better to cut your losses and seek financial assistance immediately.

Recently, the Australian Government proposed changes to bankruptcy laws that lower the bankruptcy duration from three years to 1 year. If this proposal is passed, it will have a significant effect on the stigma associated with bankruptcy and the financial consequences that bankrupts will encounter down the road. Even though most people understand the notion of bankruptcy, lots of folks 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 file for bankruptcy in Australia.

  1. Get guidance from a registered bankruptcy trustee

If you’ve decided that bankruptcy is the best approach for you, always speak with a registered bankruptcy trustee prior to making any concrete decisions. There is a massive 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 assist you with your decision-making, but also put you in the best position to make a full recovery after you have been discharged.

  1. Download the forms needed to file for bankruptcy

If you’ve come to the conclusion that bankruptcy is the best choice 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 (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. Gather your supporting documents.

In almost all bankruptcy proceedings, individuals must present 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 deliver accurate information or any effort to hide information that would otherwise be relevant to your bankruptcy proceedings is a severe offence that is punishable in a criminal court.

  1. Complete the bankruptcy paperwork.

You must address each and every question in your bankruptcy paperwork accurately and honestly to ensure it gets processed correctly. It is crucial 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 at the very least 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 don’t have enough 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 submit your bankruptcy paperwork, check the date to ensure you are submitting it within 28 days of you signing it. At Bankruptcy Experts Gladstone, we understand that all the paperwork can be a bit difficult, so if you have any inquiries regarding your any of your answers, it’s best to phone us on 1300 795 575 to ensure you get it right the first time. Alternatively, visit our website for more information: www.bankruptcyexpertsgladstone.com.au.

 

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