Bankruptcy: How To Declare Bankruptcy?

Some of the reasons for people in Australia going bankrupt are not having the means to manage their debts and their inability to repay loans to banks or their creditors. Bankruptcy is often misunderstood as something horrible, when actually it is a solution, which will allow you to reduce your debts and enable you to have a new beginning. There are even ways to eliminate and clear all your outstanding debts too, if you should so desire. Bankruptcies in Australia: Are They On The Rise? One of the conditions to declaring bankruptcy in Australia is that you must be a resident of that country or running a business in Australia. The term bankruptcy often had a stigma of failure attached to it. In the pre-internet period, it was mainly businesses that went suddenly bankrupt, and it was well known that when a business shuttered their doors unexpectedly, there was a bad smell of “being bankrupt” around the place. Nowadays, the advent of competition among banks and lending institutions has changed the face of lending money. Finalizing deals over the internet and telephone are nothing new, and offers of pre-approved loans even arrive by post. It has been shown statistically that there were around 25,242 bankruptcies in Australia at the end of the financial year of 2007. Of that large number declaring bankruptcy, business-related bankruptcies accounted for around 4,821; the rest that had declaring bankruptcy were ordinary people who had simply miscalculated their ability to repay their creditors. How Do I Proceed With Declaring Bankruptcy The term bankruptcy is defined as a legal solution that allows you to reduce your debts and start again with a clean sheet. Some states in Australia even allow you to declare personal bankruptcy. However, depending upon the jurisdiction in which you reside, the procedures for bankruptcy are varied. To file for bankruptcy, you will need to file a petition in the district bankruptcy court. The courts will then make the decision, based on your petition, to extend the repayment time to pay off your debts. In Australia, there are a lot of complicated legal issues involved when declaring bankruptcy, and a legal expert is the best person to help you chart your way through these issues. The usual procedures that are to be followed are as under: • The Insolvency and Trustee Service Australia branch (ITSA) needs to be informed immediately. • Filling in the debtor’s petitions form. • Completing the statement of affairs form. • Sending the completed forms to ITSA. • The ITSA will have a committee to review your forms. • The ITSA will appoint a trustee who will assess and collate your assets. • They will provide you with instructions on how you can best repay your debts.