How to Declare Yourself Bankrupt in Australia: A Comprehensive Guide
Bankruptcy is an excellent solution for people with severe debt concerns, especially when they have little to no real opportunities to pay back those debts. So, if you cannot appease creditors with any other proposals to repay your debts, declaring yourself bankrupt might not be a bad idea. But where do you start?
If you need help in declaring bankruptcy in Australia, you have come to the right place. In this comprehensive guide on “How to Declare Yourself Bankrupt in Australia”, we’ll be explaining everything you need to know about the process. You’ll discover what bankruptcy means and several of its integral implications you need to know before you even start the process of filing bankruptcy.
In addition, you should know that declaring bankruptcy in Australia is a fairly simple process. Once you’ve successfully made through, you’re legally freed from paying any debts; however, some exceptions apply to this. Therefore, we suggest you first speak to a professional debt consultant about your personal financial situation before getting started.
What Is Bankruptcy?
Put simply, bankruptcy refers to the process where a debtor no longer has the financial capacity to pay off his/her debts to a creditor. Bankruptcy assists debtors by stopping debt collectors from speculating about the payments. Additionally, once you’re declared bankrupt, a portion (or all) of your debts are generally discharged, and there are numerous distinctive options, also called ‘Chapters’, for which you can file.
In return, you will have to agree to repay what you possibly can to the creditors through a multi-year repayment plan or by selling your assets. Once the bankruptcy process is complete, you’ll be provided with a new financial start.
Nevertheless, it is critical to note that declaring bankruptcy in Australia is applicable only for individuals and not corporations. If you’re operating a business on a sole trader or partnership model, you or your partner can declare bankruptcy but as separate entities. Remember, the business cannot become bankrupt.
Now that you know what bankruptcy is and who can file for it let’s look at how you can declare yourself bankrupt in Australia.
Before You Apply for Bankruptcy
Seek factual information from qualified advisors only (AFSA or Registered Trustees). There are people out there providing factually incorrect information or devising schemes to hide assets that will only cause confusion or worse (possible prosecution for false declarations).
Remember, declaring yourself officially bankrupt in Australia should be an absolute last resort. Although it can save you from paying debts you can’t afford, declaring bankruptcy can have long-term negative effects on your finances, namely your ability to borrow in the future and your credit rating. The consequences of declaring bankruptcy is serious and more importantly, once you’ve been deemed bankrupt there’s nothing you can do it cancel or undo it. Therefore, be sure you read and fully understand the consequences of bankruptcy before you start filing.
Amongst other things, declaring yourself bankrupt in Australia can adversely impact your ability to receive credit. Plus, it will be evident on the National Personal Insolvency Index (NPII). Therefore, if you are stuck in financial difficulty, it’s crucial you speak with a professional to learn what impact declaring bankruptcy may have on your future financial positioning and decisions.
How to Declare Yourself Bankrupt in Australia?
In Australia, the first and foremost step for declaring voluntary bankruptcy is to file a Bankruptcy Form.
However, creditors can force a person into bankruptcy against their will via the process of a Bankruptcy Notice, then Creditors Petition which then leads to a Sequestration Order (a Court declaration of the debtor being declared bankrupt).
If you receive a Bankruptcy Notice or a Creditors Petition then you should immediately contact an insolvency expert to understand the consequences or if you wish to challenge the creditors actions.
If a person enters into bankruptcy voluntarily, they need to apply with AFSA – Australian Financial Security Authority or a registered trustee.
Requirements for Declaring Bankruptcy in Australia
To file for bankruptcy, the Bankruptcy Form is the only form required to be completed. These forms are accessible via the AFSA website if needed, you can ask your registered trustee to get them for you.
Remember to be cautious while filling these forms. Though it may come off as easy and to the point, one error can result in bankruptcy being declined. If you submit incorrect information, bankruptcy may be extended from three years to eight years. Hence it is advised to work wisely with your trustee or bankruptcy advisor.
How Much Does It Cost to Declare Yourself Bankrupt in Australia?
There is no cost of declaring bankruptcy in Australia, as there is no fee to apply for insolvency. Moreover, there is no maximum or minimum amount of debt or income limit for applying. You can not file for bankruptcy whilst you have an ongoing Debt Agreement.
Declaring bankruptcy in Australia can indeed stop creditor harassment, help clear your debts and, more importantly, leave you with a fresh financial start. However, before you decide to take the leap, it is important you understand the major consequences of declaring yourself bankrupt.
If you are not sure whether bankruptcy is the right solution for you, don’t worry. We are here to help. Our team of experts understands that the choice to declare yourself bankrupt is never easy. Therefore, every financial avenue must first be cautiously reviewed before proceeding.
At Bankruptcy Advisory Centre, we understand the stress of having debt beyond your capacity to repay and assure you that we do everything in our power to help you get back your financial freedom. So, if you are ready for a debt-free life, please get in touch for a free consultation to discuss how to declare yourself bankrupt.
As a Trustee in Bankruptcy, Ross Thomson is often required to think outside the box. As well as creative thinking, Ross brings compassion to the table.
For Ross, it’s important to see the people behind the financial problem –not just numbers.
Ross recently helped a bankrupt client who lives in a retirement village with her seriously ill husband.
The unit she & her husband live in is not owned by them, but subject to a 20-year lease.
The money to be repaid by the management was due only at sale, when the client finally left the retirement village.
Sale of the unit was likely to take several years &, if he did sell the couple’s unit, Ross realised he would be effectively evicting them from their home, without resources or family to help them.
Ross decided to contact the retirement village management & put a proposal to them that they prepay some of the moneys they would otherwise pay the client.
The village management considered the proposal & have agreed to prepay some of the moneys otherwise due.
The client is relieved that she will not be evicted & can now concentrate on helping her husband through his health issues.
The moneys paid represented about 75% of what would have been available to creditors if they waited two years.
It is a win for the client and for the creditors.
I made an appointment with Andrew after finding him on google. I was nervous and apprehensive about what to expect but he made the process of bankruptcy extremely uncomplicated and stress free, allowing myself the opportunity to get the fresh start I was so desperate for. Thank you Andrew I could not recommend you enough.
Making the decision to go bankrupt was not easy however once I had spoken to Andrew i felt all my anxiety disappear. Andrew does not judge you and he has an innate ability to put you at ease. He took care of the whole process for me again reducing the stress involved with completing paperwork.
Thank you very much.
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Andrew was very helpful in helping me through the bankruptcy process, as a single mother left with a massive debt from my ex and our previous marriage. I was struggling to keep my head above water on a week to week basis.
Andrew made me feel at ease immediately and helped me every step of the way, he happily and professionally answered any and all questions I had before, during and after the process. Thanks so much for your help Andrew!
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Very prompt service and excellent source of knowledge and information, I highly recommend Andrew's service for a quick turn around of circumstances.
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Andrew was a steadying hand with his advice.Showing that things aren't as bad as first thought nor any obstacle insurmountable. If you have questions needing answers, Andrew is the person to ask. Thanks for your advice Andrew.
Andrew was very knowledgeable, caring, helpful and compassionate when I went and saw him. He made me feel that I wasn’t the loser and failure that I thought I was being. Even down to the box of tissues on the table.. which I needed. Highly recommend to go see Andrew if your struggling. There is life after!
Andrew and his team do an excellent job of helping their clients with bankruptcy advice and it is a pleasure to work with him.
Don't hesitate contacting Andrew, I was stressed, struggled sleeping through debt. Andrew put me at ease. He listened to my situation and we decided on my next move. Andrew is professional and easy to talk too. I would recommend highly to anyone who wants help to give him a call. I appreciate your support Andrew. Regards Brett.
Andrew has given me back my life!!! After living paycheck to paycheck, I didn’t know what to do. Until I made the big step and booked an appointment with Andrew. As soon as I left his office I felt a huge weight lifted!!!
Andrew was prompt, organised, friendly and efficient with the processing of my documents and made everything very simple for me so I didn’t need to deal with the added pressure and stress. Thank you Andrew for allowing me to start afresh and getting it done within a matter of weeks.
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