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Step 1 – Get advice
It is essential that you present your financial situation to your financial counsellors, or advisors, who can upon review, suggest you with the best possible ways to deal with your situation. They might advise you with solutions other than bankruptcy, such as debt agreements, which might be more appropriate in your case. It is also recommended to check if you are eligible for bankruptcy and understand all the implications of bankruptcy as to how it can affect your assets, income, credit capacity, employment options, overseas travel plans, and other things.
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Step 2 – Submit your application to AFSA
There are 2 main forms that one has to submit to the AFSA (Australian Financial Security Authority), when filing your bankruptcy – Form 6 (Debtor’s Petition) and Form 3 (Statement of Affairs). These forms ask for information pertaining to your debt, assets, income, etc. The trustee can help you fill these forms. After completion of the forms, you can either submit them online or send them to AFSA by post.
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Step 3 – Confirmation by AFSA
After AFSA receives your forms, it may either approve them or reject them. In any case, it will give you a confirmation of your application’s status in writing within a period of 48 hours. If your application is approved, it will also be sent to all your creditors. This confirmation will contain your AFSA administration number. If your application is rejected, then the confirmation will contain the reason for such rejection.
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Step 4 – During Bankruptcy
After you receive a confirmation from AFSA, your bankruptcy period begins, which lasts for q period of 3 years and 1 day, during which your trustee can sell some of your assets, to meet your debts. It may happen that your trustee may extend your bankruptcy, but if you have discharged all your debts in full, you can even apply to annul your bankruptcy, before it ends.
The following are the steps in declaring bankruptcy:-