Under Australian law, there are two methods to declare bankruptcy. The creditor may file a petition with the court to declare a person insolvent, providing evidence that the debtor has committed an act of bankruptcy. The court will subsequently proclaim the debtor bankrupt. The alternative is to declare bankruptcy. The term for this is voluntary bankruptcy. There is no minimum quantity of debt required for the debtor to file for voluntary bankruptcy.
To declare yourself insolvent, certain legal procedures must be followed. Before a person can voluntarily file for bankruptcy, he must have exhausted all other options for credit debt resolution. It is always preferable to obtain professional assistance before filing for voluntary bankruptcy. Remember that declaring bankruptcy is your last resort. Once you've decided to voluntarily file for bankruptcy, follow the steps below.
1. Complete a Debtor's Petition and Statement of Affairs - The debtor must provide all of his personal information as well as a thorough description of his financial situation. The Statement of Affairs includes: a. The name and address of the debtor; b. The debtor's personal and business debts; c. The debt amount owed to each creditor; and d. Detailed information about the debtor's income and assets, such as real estate, vehicles, bank accounts, shares and stocks, insurance policies, and debts owed to you by third parties.
If the debtor fails to disclose a property, conceals or attempts to sell a property or asset illegally, this constitutes a violation of the law. It may incur severe penalties such as imprisonment and bankruptcy extension.
The necessary documents are provided by Insolvency and Trustee Services Australia (ITSA). This government organization administers bankruptcy cases.
The Debtor's Petition and Financial Statement must be submitted to the ITSA. The debtor may either submit the documents to the ITSA or deliver them in person to their office. Debtor's Petition and Statement of Affairs must be given to the trustee if a private trustee is handling the bankruptcy proceedings.
The subsequent stage is to await the ITSA's processing of the forms. The Official Receiver in Bankruptcy may require one or two days to approve the forms. The individual is then said to have declared bankruptcy. The ITSA will validate the debtor's bankruptcy number via letter. During the period of insolvency, this number is required for all future correspondence and transactions with the ITSA. The letter also describes the debtor's duties and obligations as an insolvent.
We trust this article has provided a straightforward explanation of declaring bankruptcy under Australian law.
The information in this article is accurate as of the date of publication, but should only be used as a guide. Always obtain professional counsel prior to taking action.""
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