My husband and I have just recently separated. He became violent during a argument in front of our 2 young children so made the decision to leave.
Everything is very settled without my husband & my kids are doing great but I'm struggling majorly financially. I have $32k in credit card debt and I'm having trouble keeping up with the payments.
I contacted a financial counsellor and Fox Symes today. The counsellor recommend bankruptcy & FS recommend a debt agreement. I'm torn as I am so stressed about my current situation but bankruptcy doesn't sit right with me.
I'd love advice from people who has made the decision for either bankruptcy or a debt agreement and how they made the decision.
Thanks
5 Replies
Get another opinion from a financial counsellor, but honestly I think the counsellor is correct. Unless you earn big money you will never pay that off.
Having lived through bankruptcy, in my opinion, it is tough. For three years+ you will have to live on cash alone. There is NOWHERE to get extra if you overspend or an emergency happens. Even after you are discharged no-one will give you credit for ages, except the sharks and you don't want to go back to where you are now... Whichever way you decide, you have to get your spending under control - budget and stick to it. Get another opinion - from a financial counsellor or accountant (Salvos have a free service) and which ever way you go keep going to the counsellor at least every month after the declaration to help keep you on track (same as a PT at the gym or a Weight Watchers meeting) - nothing like support to keep you going. Your pride will take a battering too, so consider confiding in a close friend who can help you psychologically or ask your GP for a referral to a psych. The only good thing about it being CC debt if you declare bankruptcy is that it is more anonymous - it's not your local store or school or mechanic that you have to keep seeing everyday that you have let down. Be careful with FS advice - they make money out of your debt agreement, so it is in their best interests to recommend the agreement over bankruptcy. Sorry my advice is so disorganised, there are just so many things to consider in your situation. Good luck.
PS I have assumed you don't have a home/mortgage - if you do then you MUST get another opinion as bankruptcy will allow your mortgage provider to sell your house for as little as the mortgage amount, NOT the true value, which further reduces your ability to pay out your gross debt...
A debt agreement is an act of bankruptcy (like the final thing you can do before bankruptcy) so TBH it's really what you can deal with. FS were great to me - they deal with all of the creditors and take a lot of pressure off you. If you want to have a crack at paying it off I would recommend it.
Would you have the debt paid in full in 7 years? If you would than do not go bankrupt if you wouldn't go bankrupt and save yourself the stress of having to find repayments every month.... Good luck!
Contact your local cap office they are brilliant and should be able to help
http://www.capaust.org/