Chat with us, powered by LiveChat

Becoming Bankrupt - Your Checklist

When you have decided that bankruptcy is the right path for you, there are a few things that you will need to organise, in addition to the paperwork process.

 

We have created a checklist outlining some simple ‘golden’ rules to follow for you to have a seamless, positive experience as you progress to becoming bankrupt.

 

Golden Rules:

  1. Identify your ongoing living expenses such as electricity, gas, internet, phone, etc., and continue to pay them so they are up to date as possible.
  2.  

  3. Identify non-critical expenses like credit cards, personal loans, bank debt, tax debt, etc. The bankrupt estate will absorb these, so you can stop paying them.
  4.  

  5. Following up from rule 2, make sure you cancel any direct debits from your bank account to creditors that your bankruptcy will absorb.
  6.  

  7. Make sure you have some cash handy for essentials like fuel and groceries, just in case your account is frozen for a day as the bank is processing your bankruptcy. It is unlikely to happen, but it is best to be prepared and have the cash and not need it.
  8.  

  9. Stop any communication with your creditors. Your bankruptcy trustee will contact them and make them aware of the process. They are no longer your responsibility.
  10.  

  11. Where possible, lodge any outstanding tax returns. Any tax liability will be absorbed by your bankruptcy, so it is best to get on top of it earlier so it is one less thing on your mind. If you are unable to get to this, that’s ok, your outstanding tax returns can be lodged after you become bankrupt.
  12.  

  13. If you have a high-paying job or own a house, it's important you know what you can and cannot do. If this is your situation give us a call on 1300 764 197
    or email hello@understandingbankruptcy.com.au and we will explain your options and the process, so you know what opportunities are available to you. Many find talking about this useful for planning their pathway forward within the law and it also helps to lower stress.
  14.  

  15. Don’t take out any more debt. Stop using things like credit cards, after pay or borrowing money in any capacity.
  16.  

  17. Do not borrow money to pay the cost of becoming bankrupt.
  18.  

  19. Don’t sell, transfer or hide any possessions that will be part of the bankrupt estate. This can lead to an investigation later in your bankruptcy that can add a lot of pointless stress and complications.
  20.  

  21. Leave your superfund alone! Do not access any monies from your superfund before entering bankruptcy.
  22.  

  23. If you own an insolvent company, you will need to put the company into liquidation prior to becoming bankrupt. If your company cannot afford the upfront costs of liquidation, you do not need to borrow monies. Don’t do anything; it will be sorted once you are bankrupt. When you have confirmation of your bankruptcy, lodge Form 296 with ASIC. When the company becomes directorless, ASIC will deregister the company for free. If you require a liquidator for your company, we can give you the details of a trustworthy one.
  24.  

 

For insight into how bankruptcy works, we recommend our article Getting On With Daily Life which can be accessed here

If you have any questions on bankruptcy or would like to discuss your situation, give us a call on 1300 764 197  or email hello@understandingbankruptcy.com.au and we will help you.