Declaring bankrupt. I don't want to go into the wheres, why's and the how's of how I ended up in this situation.
Here is the situation. I owe someone 40,000. I am a single mum of 3 and uni student. My only income is single parent pension, I own a car that might be over the threshold of what they allow you to keep (I paid 11,000 at a dealership in April), according to the financial counsellor I spoke to today I most likely will be able to keep it. I currently have 6,000 in the bank with no debts.
I can borrow the money and repay it (mum will take out a personal loan) the interest is 22,000 meaning I am paying back 62,000 over 7 years.
Is there life after bankrupt.
If this was your situation what would you do?
I am leaning towards declaring bankrupt but not sure what to do.
21 Replies
The reason I am looking to declare bankrupt is I just feel that it's too much pressure on myself paying this loan off over 7 years. I just feel it's dead money as well. It's a huge mess. I feel borrowing money is how I ended up in this mess (actually it's my ex-husband who's left me with it) and to borrow more is delaying the inevitable......
Have you looked into the details that come with declaring bankruptcy? I dont know, but i believe there are conditions that make it not something youd choose if you can avoid, things like not being able to travel overseas for 7 (?) years, bad credit, making it hard to get back on your feet. Id look into that side of it first & make sure theres nothing that will stuff up your future.
If you could pay it off, you could contact your debt collectors & say, look i can pay this much & most institutions will negotiate it down LOTS. So, you could get your $40k down to $25, or lower, just tell them this is the maximum loan i can get approved for. Tell them you'll have to declare bankruptcy. Then whack your $6k straight into it, then youd be looking at a loan of 19k, which would have much lower interest & be a little easier to swallow.
I know thats in a perfect world, but its worth a shot. Debt & Money stress is the worst, Good luck!!
* youre bankrupt for three years, you cant declare bankruptcy gain within 5 years, it can affect any time you apply to declare it again in the future, you surrender your passport, bank accounts, property to trustee who decides how that will be allotted to the creditors. That includes your car, jewellery & household items. A person who is bankrupt is not released from their duty to pay off their debt, it just means creditors cannot pursue legal action against you.
I feel I need more information. It's not as simple as declaring bankruptcy as that means somebody misses out on getting their money, in this case your ex husband. I'm assuming he would be pretty pissed about that. I think you need to take $5000 of your savings and get that off the debt. Leaving you with a $35000 debt. I then think if you can you get a $2000 car and get rid of the $11000 car so you can give that to your ex. Meaning you may owe him under $30 000. I think you need to suck it up and pay it. Yes it's hard work but it's the right thing to do. Bankruptcy may seem like the easy option but it really isn't and the relationship with your ex will become truly nasty.
It's also only 7 years, that's not very much in the scheme of things.
Seven years is a long time, you won't be able to get credit in that time even for a new fridge. What happens if the kids need something big in that time etc...
Bankruptcy follows you around for a long time just be sure you are ready for that.
Maybe call one of those debt supoort hotlines first to see if there other options.
What ever you decide I hope your back on your feet soon. Good luck mumma.
they can't help as I'm unemployed.
:( fair enough, I would say then just do what ever you feel more comfortable with.
Ex's have a way of making things harder than they need to be, karma will find him and she never misses.
I don't owe the exhusband money. I am in this mess because of him.
Sorry my bad
I would still pay the debt 7 years versus having bankruptcy on my record seems like a no brainer to me
i sincerely feel for you this happened to my mother. Unfortunately my father was a con artist - my mother was left with an enormous debt left a single mother of a 3 an 6 year old lost our house, car everything - we all ended up living in a share house with mums friends mum worked full time during the day, she had a night job and worked weekends selling towels at the markets - it took my mother 12 years from the split from my father to get back on top with no family help at all we had a lady live with us a 3 years pick us up from school and prepare dinner in exchange for a room and food. 11 years on from those 12 years of debt and hardship she is flying! A million times better off than my sad excuse of a father child support also slapped him when he did his taxes after 8 years. Is there anyway of your ex being forced to take responsibility for the debt he left? I would seriously look at other options before bankruptcy because if you do need help you can be restricted unless you intend to move state where your bankruptcy is not recognized. i would seriously see a financial adviser. all the best!
If you're on centrelink you can apply to get your super early in case of financial hardship ( this would qualify you) then along with your lump savings that would bring the total down quite a lot before you got a loan.
They don't release for debt like this and assuming she has much super at all - I've only got $30k myself and they don't give you much at all when you do apply (like $5000 or so). Only if you're losing a house/medical issues/death in the family.
Even $5k is better than zip. They released mine to pay bills - car loan, loan from family, overdue bills like phone, electricity etc.
My ex-husband has also declared bankrupt (which is why this falls to me now and yes I believe he is a bit of a con artist too among other things. I have a DVO out on him). I have my lawyer advising me to declare bankrupt and have sought financial advice. I just don't feel there are any other options, I feel I've looked into them all :(
I am just about to finish my bankruptcy. It is actually only for 3 years however you remain on the bad credit list for 7 years. We were in a much worse situation (mortgage 350k, credit card 25k, personal loan 20k). We had no savings at the time. They didn't take either of our cars, any of our personal belongings (or even enquire about them) and didn't touch any of my husbands tools as he needs them for work. We went through a lady by the name of Gae Channels, www.bankruptcyservices.com.au she takes care of all the paperwork for you and arranges everything, sort of like a lawyer. We have no found this to have affected us at all. We were still able to continue with our phone plans etc, had no trouble renting. They will take some of your earnings if you earn over a certain amount but being single with dependents that shouldn't be a problem for you. You get assigned a trustee if you have any questions, and you can go overseas within your bankruptcy time you just have to have it cleared by your trustee first (basically they need a return date so they know you are coming back to aus). Give Gae a call, she is very good and will help you discuss your options. She will tell you though to get rid of your savings. Can you have a friend write you a recipt for owing them money or something? Open an account in your kids names and get rid of it. Hope this helps and good luck.
Thanks for that.
I am not sure how to get rid of my savings without it looking fraudulent.
If I put it in accounts for kids won't they still take it anyway? I know they will ask for bank statements and then will want that money.
No there are ways around it. You can get a friend to write you a receipt for some furniture, say $1500 worth, then draw out $1500. Give yourself a month or 2 before you declare, you can just keep talking to the creditors you owe and say you are trying to sort it out. We didn't pay a cent on anything of ours for nearly 12 months, we just kept talking to them and letting them know we were trying to find a way, even though we knew we were going bankrupt (but don't tell them that). Gae will advise you to stop paying everything as soon as you've decided but give yourself a little bit of time before actually declaring it. Then once you've decided, everytime you buy groceries or petrol anythjng where you can get cash out, get cash out and stash it away. You will dissolve your savings in no time. They can't question you for removing money in dribs and drabs, large amounts yes, but if you have a recipt from a friend, no. After it's all finalised open a new bank account and start putting it back in. Other people may think this is dishonest and dodgy but you need to look out for yourself and children. You have been left in a financial mess. The companies you owe have insurance policies in place for this type of thing so they will get their money regardless.
The best thing you can do is keep in contact with the debtors and make payment arrangements that suit your budget. You can look into moratoriums and temporarily reduced payments due to extenuating circumstances.
However, on reading all the the responses it sounds like your still too busy blaming your exhusband for all your woes. I'm not saying he hasn't caused you sorrow, but it takes two to make it and two to break it. I'd stop focusing on how he left it with you I'd be focusing on the people who don't deserve to be shafted out of their money, and on your children who don't need the extra hardship of struggling financially from a decision that will affect you for a very long time to come.
Bankruptcy is for desperate situations. Buying an $11,000 car is not a desperate situation. Why don't you go and get a job and pay it out instead of being denied credit and bank loans for a quick fix "get him out of my life" choice?
As someone that has been bankrupt for 5 years it has made no different in my day to day life. As I still pay my bill and didn't change Provides. no one looks to see if you are if you dont change anything. In saying this I wish I had never went down this road i had no choice and it wasnt from a load i couldnt pay back. there is alot of paperwork to fill out and they are watching you. You may have to sell your car but they will not take from children so there are ways around it. Good luck