1. Before you declare bankruptcy, get advice from a registered bankruptcy trustee
If you’ve decided to declare bankruptcy, it’s a good idea to speak with a registered bankruptcy trustee.
A registered bankruptcy trustee is a licensed practitioner who is permitted to control the administration of bankruptcies or personal insolvency agreements. Only licensed professionals can render such services.
There’s a HUGE difference between a business that charges to help you go bankrupt and a legitimately registered bankruptcy trustee firm.
Sometimes, the guys offering paid “bankruptcy services” are NOT registered bankruptcy trustees. In some cases, they’re not a registered practitioner of any kind.
We’ve heard so many horror stories about advice received from some so-called “bankruptcy experts”. Also, most of these businesses charge fees from a few hundred dollars up to thousands! To top it all off, the advice rendered to some of the victims we’ve spoken with is woefully inaccurate.
If you’re going to declare bankruptcy, it isn’t the end of the world, but it is serious. Exorbitant fees and amateur advice could leave you high and dry, not only in the short term but the long run too.
Things to ask a registered bankruptcy trustee about before you declare bankruptcy
Certain “No-brainer” pre-requisites should trigger you to get proper advice before you declare bankruptcy. A registered bankruptcy trustee can easily give you the low-down if you;
- Are earning more than $75,000 gross taxable per year
- Own or have an interest in any real property like a house or an apartment
- Have an interest or own other assets like boats, caravans, camper vans or trailers
- Own or have an interest in vehicles owned outright worth more than $8,000
- Have an interest in vehicles under finance that have more than $8,000 worth of equity
There can also be less obvious circumstances that you should talk to a registered trustee firm about. These might include whether or not you;
- Have contributed to the purchase, maintenance or improvement of an asset which is not in your name
- Might have an interest in property located overseas
- Own or have an interest in any shares, options, rights, convertible notes, term deposits, managed investments and insurance bonds
- Are owed money by someone else
- Have transferred any assets to another party without being paid your share at fair market value
- Own or have an interest as a shareholder in assets owned by a company
- Are the beneficiary of a deceased estate
- Have an interest in assets being held in trust
- Are salary sacrificing a portion of your income before tax
- Receive fringe benefits from your employer, like the use of a company car or free rent
Aravanis is one of the largest registered bankruptcy trustee firms in Australia. Part of what we do is provide free consultations for people considering bankruptcy and we also help people become bankrupt for free.
If you’ve got any questions about how bankruptcy might impact you, call one of our consultants on 1300 369 128, start an online chat with us or make an online enquiry and we’ll call you.
If you’re confident about your position and have already sought appropriate advice, proceed to the next step. Alternatively, If you’re unsure about what bankruptcy is, we’d recommend you start with What is Bankruptcy? A guide to Australian Bankruptcy.
2. Download the forms needed to declare bankruptcy
There are two sets of documents that you’ll need to download and complete in order to declare bankruptcy.
- The Debtors Petition is a 3-page long document which you can find here
- The Statement of Affairs is a 25-page long document which you can find here
3. Gather your supporting documents
“What supporting documents?” we hear you say. Don’t worry, we’ve got your back.
You may need to supply some extra documents or information depending on your situation. Here is a list of the most common criteria for supporting documents:
You’ll need to provide supporting documents regarding income if you’re:
- Earning wages or a salary – Provide 2 recent payslips and your last available group certificate
- Self-employed – provide your most recent tax return
- Receiving any payments from Centrelink – provide a recent statement of benefit
Do you pay or receive child support?
If the answer is YES, you should provide the most recent formal child support assessment/notice which shows your ongoing and current liabilities or entitlements and your percentage of care.
Are or have you been involved in any family law financial proceedings?
If so, you’ll need to provide copies of any family law or spousal maintenance orders or applications
Has a creditor taken any legal action against you?
If so, you’ll need to provide copies of any summons, writs, bankruptcy notices or other relevant documents
Do you have any involvement as a beneficiary of a deceased estate?
Then you’re going to need to provide a copy of the will
Have you sold, transferred or gifted any assets within the past 5 years?
If you’ve recently sold a property, a property settlement statement or disbursement report will be the ticket.
Were or are you running a business as a sole trader or partnership?
You’ll need to supply your tax returns and also a copy of the partnership agreement (if applicable).
Are or were you running a business as a company, a trust or a mix of the two?
Supply the last available tax returns and financial statements. Also, supply a copy of any trust deeds if you’re running a trust or trusts.
Are you or your property subject to any proceeds of crime orders?
You’ll need to provide a copy of the court order or application
Once you’ve gathered the necessary supporting documents, your debt statements and two forms of ID, you should be ready to fill out your paperwork.
4. Fill out the bankruptcy paperwork
It’s important that you complete the forms not just accurately and truthfully, but also properly. The processing of your paperwork will depend on your ability to complete it correctly.
HOT TIPS to keep in mind when completing your forms
- Make sure that you answer all of the questions – none of them are optional
- Include the address details of your creditors in the secured and unsecured sections of the paperwork
- You’ll need to provide two types of ID on the debtor’s petition. Here is a list of acceptable secondary forms of ID provided by AFSA
- You might have more bank accounts, secured or unsecured creditors than there is room on the page. If so, print another copy of that page and use it fill in the extra details
- If you’ve sold any assets in the past 5 years, make sure you list them in question 33. This includes all assets, so don’t just think property, also think cars, bikes, boats, shares, etc
- Check the date of the paperwork before you lodge. Lodgement of the forms must occur within 28 days of you signing them.
5. Lodge the bankruptcy paperwork for processing
We understand that the forms can be a bit overwhelming. For that reason, we’re happy to review your paperwork for free.
You can email your forms and your supporting documents to us on email@example.com with a subject heading of PAPERWORK FOR REVIEW.
Again, there is NO CHARGE to do this. It’s completely FREE. If you’re still not convinced, you can read about how and why we offer this service for free here.
If you have any questions, call us on 1300 369 128, start an online chat or make an online enquiry now.