Making the decision to declare bankruptcy is not easy and should not be rushed. Whilst bankruptcy might wipe out all of your unsecured debt, but there are severe consequences that need to be carefully explored. Before you decide to file for bankruptcy, we recommend that you carefully weigh up your options and seek professional advice.
Here are the four steps you need to take before you declare bankruptcy.
1. Have you carefully assessed your options?
It is important to consider all of your options before you decide to file for bankruptcy. The decision to file for Bankruptcy should not be taken lightly and should be your last resort. You should firstly check if you can make payment arrangements with your creditors first (either informally or formally through a Debt Agreement or a Personal Insolvency Agreement. If you genuinely cannot pay off your debt and you don’t have assets which would be sold in bankruptcy, then voluntary bankruptcy may be the best option for you.
2. Are you eligible?
You must assess the criteria of bankruptcy. Firstly you must be insolvent and you must be present in Australia at the time you file for bankruptcy. AFSA (the government agency) who considers bankruptcy applications will firstly assess if you are insolvent. When conducting this review AFSA will assess if you are able to repay your debts in full within a reasonable period of time. Secondly, AFSA will review the address you have provided on the bankruptcy application. For it to be accepted you must have an Australian address. So if you are an Australian resident but living overseas, you would need to return to Australia to file your bankruptcy application.
3. Get expert advice
Before you decide to declare yourself bankrupt, you should get expert advice. A registered bankruptcy trustee will know all about traps and pitfalls of bankruptcy. Bankruptcy can be complicated so you should only trust a fully qualified expert. When you speak to the expert, make sure that you truthfully disclose your full circumstances. Hiding assets or not truthfully disclosing your details could result in your bankruptcy being extended to up to 8 years (from the usual period of 3 years). If you disclose all of your finances truthfully and honestly, our expert will be able to find the best debt solution for you.
To get free advice one of our experts, you can take advantage of our Toll Free advice line on 1800 676 598
4. Complete & lodge the bankruptcy forms
The last step will be to complete and lodge the bankruptcy forms with AFSA. To file for bankruptcy, you will need to fill out a debtor’s petition, a statement of affairs and prescribed information. Make sure to take your time when filling out these forms so that everything is correct. If you are ever unsure about how to complete these forms, you should contact a professional bankruptcy trustee for assistance.
The process of filing for bankruptcy can definitely be stressful so we can take away that stress for a once off fee of $600. Our fee covers a thorough assessment to explore if you are eligible to avoid bankruptcy. Most of our clients feel a great weight has been lifted from their shoulders once the bankruptcy application has been processed and accepted by AFSA.