Hey hun, XDH and I declared ourselves bankrupt in 2003. I suggest first you take part in a thing called a Part 9 Debt Agreement. They consolidate all your loans into one and you pay off one amount per week/fortnight/whatever. The good thing is that it's all taken care of by a seperate company so there are mno more nasty phone calls.

At the time it was seriously the only option we had. We closed our business and XDH was earning $500 a week and we had a 2 year old and a 6 week old. It didn't impact our lives at the time because he wasn't earning enough to be able to get credit for anything but years later when financially we were very well off, we still couldn't get anywhere. As we had debt in both our names we were both declared bankrupt.

Last year I was lucky enough to have a lady in the bank take it as her personal mission to get me a credit card lol. And I have one - for $500. But still can't get a phone plan, major CC, finance anywhere like Harvey Norman etc...

We were incredibly lucky that a friend of ours put his name on the finance for my car (which is now paid off) but there are not many people around who would do that.

There were only two positive things to come out of it - one was the fact that we had no more debt, and two - it taught us to budget well. If you can't possibly GET credit then you learn to save for whatever you want. I'm glad we did it but only because I know how terrible we were with money and had we been able to we would have gotten ourselves into a lot more debt.

I wouldn't recommend it. The Part 9 Debt Agreement goes on your credit record too but it makes people aware that you are trying to pay your debt and not just walking away from it.

Goodluck, if you have any questions just holler!