Bankruptcy or no Bankruptcy??

So we went to a counciling session today (our councilor is also a financial councilor) anyway during the session we realised that most of our stress is coming from debt that is not constructive (eg car and personal loan a while ago). We have been advised by several people to declare bankruptcy and were again advised to do so today by the councilor.

So I know this is a long shot, but is there anyone out there who has had to go bankrupt???

I'm so scared that it will mean we can never get finance for a house etc ever again, and I also really fear losing our second car (cheapie but still financed) as I'm a pretty social person.

What was it like for you. What were the pros and con's and did you get back on your feet, also how did you find getting a loan after you were released???

Basically I just want to talk about it as I'm not sure of what its like in real life and not on paper...

TIA
Ella

I am not too sure on this one! But I wish you all the best!! When i get down about finances I think.. i am healthy alive and have beautiful healthy children.. nothing else matters!

Good luck!! Either way!

I'm not sure, have a hunt around because I'm sure someone asked this a little while ago.

I think it would really NOT be worth it - it's a looooong time to go without.
Can't you make a better arrangement with those you are in debt to?

and geez, how much could it be if it was just a personal loan and car finance?

It's $41,000, but its crippling us, we are sitting on the debts and they're not budging at all. Plus they are putting so much stress on our relationship.

I agree it's a super long time, but as DF said today, on his one trainee income we are goign to be doing nothing for the next 5 years anyway... I don't know it seems so hard to decide and is definitely not something to be taken lightly!

if you declare bankruptcy, it's a long time before you can do anything (financially)...and it goes on your credit history. Are there any other options before doing this? can you consolidate your loans or negotiate with your loan providers to come to an arrangement for payments that are more affordable?
I think bankruptcy would be the very very last option and I know I'd try as hard as I could to avoid it.

Imagine at the things that could change over that 5 years though. DH might be offered a fantastic well paid job somewhere and you'd still be stuck with the bankruptcy.

Maybe get a second opinion from another councellor?

Is there any way of your DF picking up addition work or maybe putting the traineeship on hold for a higher earning income in the mean time? The other option is making your own choice of getting rid of the 2nd car. I know that is a tough call, but cars really do cost a fair bit. I certainly know how much it has hit our budget having a 2nd car now. Is there any reason why you don't share a car? Can you drop your DF at work on the days you need the car? (Just throwing around ideas)

Hmm the second car is on finance and we will have to default on that loan to get rid of it, which I am sure they will chase us for. It was a dumb loan choice ($12,000 for a $6,000 car) but the only way we could get a car at the time- oh how we rush and demonstrate stupidity!

DF can't give up job as he isn't qualified in anything else and therefore we will still have a ****ty wage anyhow.

I am leaning towards not wanting to d it after researching it this afternoon, but hte look on DF when he considered being able to wake up one morning not worried about which bills we would prioritise to pay and which we would put off and take abusive calls from makes me want to do it.

Why isn't there some magical fairy that comes down when they see you have learnt from your stupid naive mistakes. Why can't the magical fairy drop in for a cup of tea right now and say- "ok I can see you know what to do now... here is a clean slate."

I just feel so hopeless, it seems such an insurmountable amount of money and I don't want DF and I to end up separating because we are both so worried over $5...

I don't know.

Hi, not me personally but while I was living at home my mum went bankrupt. I can't say anything positive came out of it and she ended up in the same situation a few years later. Now she is unable to get any form of credit, which is probably a good thing for her.

I hope my post doesn't sound nasty but my mum has underlining issues that lead to her debt and she still struggles with these issues thus going bankrupt did not assist her to get things together and has left a lasting impact on our relationship. She was advised to go bankrupt twice by financial counsellors. Just before the period of time was up for the last one my grandmother died and left her a significant amount of money which was all given directly to the debt collectors as per terms of the bankruptcy which was another mental set back for her.

I understand the stress of money and debts and that horrible feeling of having to pick and choose what to pay and what not to pay but I would encourage you to try every other option before bankrupcy as it really does leave a mark on the your future prospects. Wishing you all the best and hope you find a solution that works for you!

My sister declared bankruptcy about 10 years ago, and it was the worst thing that could have happened to her. Yes, at the time she felt she had no other choice. But that choice she made 10 years still lives with her today. The bankruptcy may be cleared now, but she still can't get finance due to her credit history. She would give anything to be able to borrow money for a car and/or mortgage, but she has been declined on many occassions.
Please consider this in great detail and speak to many experienced people in the industry before going ahead with this. It's an awful thing to have hanging over your head.

Ok, saying this as someone who has had the phone calls, services cut off etc. You may need to be the one to go out and earn some money. Even just 1 day per week can make a huge difference even after childcare fees. I think at this stage with things so dire for you financially and for your relationship, that you would some very good reasons for not getting some work. Also think of your little one, he would be picking up on your stress, he may actually benefit from you working and some time in care. I started work again when DD1 was about 1 and it was just in time for us financially. It did not make everything 100%, but took some of the pressure off. Along with that I felt so much better for getting out that one day per week.

I agree with Astrid. You may be able to get a better paying job.

No, I wouldn't do it.

Bankruptcy isn't just something that clears your debts and then gets wipes after a few years. It's with you forever. FOREVER. You can apply for finance/loans, but they'll just look at your credit history (and some 'bankruptcy list' with your name on it )and go "ah, nup, we actaully want our money back". Bankruptcy tells people that you don't pay your loans. Because when you declare backruptcy, your loans DON'T get paid, so the banks/companies who loaned you money don't get it back. I think they can take assets if the loan/finance was for a car, they can take the car too. You'll have a hard time convincing people that you will pay the money back. Plus you'll have restrictions on how much money you can have in the bank, the value of the car you can own etc.

Maybe you need to think about a job? Possibley part-time while your partner is at home? so theres no childcare fees. Or one or two days a week. Like Astrid said, it might not seem like much but it could make a little difference.

I think, bankruptcy might seem like the 'easy' way out, to get rid of debt, but I don't think it's worth it. It really should be the absolute ABSOLUTE last straw...

Here's some links to other BB threads Lulu was talking about.....

So, dp wants declare bankruptcy

Tell me why declaring bankruptcy is bad

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!

I went bankrupt 10 years ago due to some huge debts I was left with after leaving a bad relationship. I tried for 2 years to pay these off myself and just could not get anywhere. So I decided I deserved a fresh start, so I went backrupt. I applied for early release after 6 months and that was granted (I am actually unsure what this actually did for me). After 5 years, I applied for a small car loan through RACV and this was approved. The year after we purchased a house but just put it in my husband's name only (I had married the year before). 3 years later we purchased a investment property in both our names, nothing came up. I also changed our home into both our names and there was no issue.

Now I don't know if because I was very young and had no asset (except a car), my debts were wiped and now it is like it was just a bad dream (just how it should be). Now that 10 years have passed my credit file is clear. Other than my 2 mortgages I aim to not have anything on credit. If it means not having a brand new car or putting something on lay buy rather than my card then so be it. Now the bank are always sending me letters asking if I want a higher credit limit, I guess I am not seen as a risk anymore.

I was so stupid when I first moved out of home and get GE money finance for the things I needed to set up house. I couldnt pay it off and the interest at 28% was klling me. I have recently set up an agreement with a credit agency that now has the debt that I have a fortnightly direct debit (that is going to hurt me) to pay it off within a year. No more interest either.

Like CQueen said, look at gettign your debt put into one payment which freezes all interest then you should get somewhere with your debt. Soem of these agencies can even compromise with the people you owe money to to lower the amount that you owe.

GL hun

There's always ads for Fox Symes at the top of the page - they will consolidate all your debts into one, and make special arrangements with the companies so you can pay it off slowly, with no interest. They take into acount how much you earn and how much you need to live as well, and most of the people I've heard from say they are actually better off NOW than they were before Fox Symes :)

I think your relationship and stress is worth a million times more then being bankrupt for 5 years. BIG DEAL.. 5 years is nothing, save what you can during that time if you can. Otherwise you and your partner have each and that is the most importnant.

Buying a house is to me so not important.. it will be nice one day down the track but having each other and being stress and being a stay at home mum is much mum more important then buying a house or a car or getting a personal loan for something.

Good luck my dear!

Yep I agree but I think people are just explaining that there are options other than bankruptcy. And it's longer than 5 years...it's still affecting me now and it's been nearly seven years.

Hmm, I'm no expert but I'd try to avoid bankruptcy if possible. It can affect a lot of things. For an example, even when you take out an insurance policy for your car, home or business etc. the application form asks the question "have you ever been declared bankrupt?" and it can effect an insurers decision to insure you because you might be seen as higher risk. That's just an example of how it can filter into other area's of your life.

What about debt consolidation like someone else mentioned?

Also, not sure if you are already working, but if not, would you consider getting a PT job on weekends?

PS: FWIW we have one car. it's hard but it's do-able.

I should say that even if you're still paying off the car then you'll get to keep it if you do declare yourself bankrupt as long as you're not behind in the payments. They won't take the car as it's still financed it doesn't belong to you does that make sense? It's the same if you go into the debt agreement.

What about a night/evening job? Packing shelves? Cleaning? Working in aged care? That way your partner could be the carer? If you put every cent you earnt into the debt you would prob be debt free in less than 5 years? I would think that bankruptcy would be an absolute last resort and while your debt probaby feels insurmountable - to stuff your credit for such a (relatively*) small debt would be a shame.


* I don't want to discount the stress your debt is causing but I believe with good advice you could avoid bankrupcy as $41K isn't huge

Have you thought of trying a financial budgeting company? My bro and his wife were getting themselves into a bit of financial trouble early last year and signed on with My Budget and are now doing quite well. They told them all their debts (including to parents) and I think they organised payment plans with creditors AND they even set aside money each month for savings....I think all their pay goes to them and they then give you money each week to live on....My bro thinks it is great - and if he ever needs money (e.g. broken down car) he just rings them and he can access his money (savings and money set aside for bills) from there, but they just let you know how this will affect your financial situation first (he describes it as 'a conscience' talking to him).

Something like that might be worth a try???

Whatever you decide to do dont go through Fox Symes. Thats what my partner did when he got himself into a bit of trouble and hes in even more trouble now because of them. What he thought was a debt agreement turned out he is technically bankrupt but still pays off his creditors.. :confused: i dont fully understand it but he is the middle of a huge fight with them, hes refusing to pay but they keep depositing money out of his account. He has even tried to file for bankruptcy but apparently cant because of the agreement he is on... it is such a huge mess.

But i really do think you should get a second opinion and really think about it, as much as it will be a relief at first you just dont know how it will affect you in the future. As for your second car as long as its worth less than 6 grand it wont get taken off you.

Good luck :hug:

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Whatever you decide to do dont go through Fox Symes. Thats what my partner did when he got himself into a bit of trouble and hes in even more trouble now because of them. What he thought was a debt agreement turned out he is technically bankrupt but still pays off his creditors.. :confused: i dont fully understand it but he is the middle of a huge fight with them, hes refusing to pay but they keep depositing money out of his account. He has even tried to file for bankruptcy but apparently cant because of the agreement he is on... it is such a huge mess.

But i really do think you should get a second opinion and really think about it, as much as it will be a relief at first you just dont know how it will affect you in the future. As for your second car as long as its worth less than 6 grand it wont get taken off you.

Good luck :hug:

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Hi, I was in the same position. Definately get a second opinion, I would also stay clear of Fox Symes.

I was in the same position and brought a book that explained it all. Home

The book was kind of small but it did have what I needed and it only cost me 35 bucks. Good luck with it.