Declaring Bankrupt....

[~Chick79~]

Can anyone share with me the pros and cons of declaring bankrupt....

We just have so much debt (none that is really significant) and yes my DH is on good money but all we seem to be doing is paying off personal loans and credit cards! :(

Is there anything that you CAN'T do after declaring??

[Billy]

:hugs: Babe I'm sorry to hear you are going through this...

I believe that after declaring bankruptcy it is next to impossible to get a loan, or any type of credit for quite some time... I think 7-10 years or so? :detective:


It would make it very hard for you to get a house loan in the future.

:hugs:

[aardvark]

It causes issues if you want finance, it will affect your ability to run a business......

You'd be better off getting a consolidation loan, paying out your cards with funds from the loan and cancelling them. Get a debit card if you want credit card convenience without the debt.

[punkbaby]

As said by the others ^^^^ :) you also cant buy anything (purchase new assets) as they can sell it on you to pay your debts

I would rather go to one of those places that consollidate your debts for a small fee...at least your not going bankrupt then and you can get back on your feet easier

I think that it should be a last resort, most creditors are understanding though to some degree if your honest, i know when i had my car crash i couldnt work and i rang them and made arrangements and they were fine about it..explore your options and try find out more first :)

[catalicious]

It should be the last possibe thing you should do...

They will take everything of value from you to cover the debts..

You will not be able to get any kin of credit for 5 years and after that most places will still not loan to you...

Please dont just rush into this... go speak to a financial planner...

[PunkyDiva]

Sweet, I really hope you don't go the bankrupt route, lotsa other options to try first.

I've heard there's companies that will take over the management of your debts, renegotiating repayments at reduced amounts or no/little interest with your creditors. They take this amount from your pay and basically you pay for household expenses (food etc) with the balance as you see fit.
They would charge a small fee but are able to negotiate better then you or I and gets rid of some of that stress surrounding debt.
If you do this then when you do want to buy a home they can help with this and it actually looks better to banks that you took a route such as this and therefore stood by your obligation to repay debts rather then just go bankrupt.

Keep your chin up and do some more research/make some phonecalls please as bankrupcy should really only be a last resort when all else has failed. I beleive you can only have one vehicle up to vale of $10000 and anything of value in your home could be sold, as I said very extreme unless you have lotsa seperate registered business's.

[Scout]

Leish - don't do it and try not to even consider it to be an option. It will be with you forever.

You need to explore the options with a financial advisor. If your DH earns decent money then there will be a way out.

:hugs: to you honey.

[~Chick79~]

We are not "struggling" as such... just not getting anywhere in the sense of saving etc as after the ridiculious high rent and cost of general living the rest of our pay goes on our loans....

Unfortunately I don't think a normal Debt consolidation for us will work as our car is not worth even half of our debt so they will have nothing to use as security!

And after doing some research on the net at Debt Agreement doesn't appear to going to be an option as DH brings home more then the "allowed" amount....

Gotta some more thinking and budgeting to do I think....

[luckie_me]

my brother went bankrupt, for 20,000. Not alot of money really. One thing he has told me is that if it ever came down to going bankrupt then it better be for alot of money LOL!

Sorry about ur problems i hope u work it out soon. Im having issues myself at the mo

[Areca]

Bankrupcy should be your absolute last resort. When you have done everything possible to get yourself out of a situation and are truly stuck.
Look at moving, selling off things that you don't need (even furniture, if it's just there to look good get rid of it), work out a budget and stick to it!
DH got screwed over so many times when he ran his own business cause people would get him to do a big job and then declare bankrupcy. It made us seriously struggle financially. I hate hearing people declare bankrupcy cause they want to clear their debts (not saying you are, but there are people that do it).
If you're not struggling to put food on the table, living in a dump and not being able to pay any bills then you aren't bankrupt IMO.

[Wilby]

go and see a financial planner or financial counsellor. You may be surprised how much they can help you!

[Mrs AJC]

Have you checked out the website Simple Savings?
You can subscribe to the free email or pay like $47 per year access to the "vault" but that money is on a guarantee for 12 mths - if you don't like the site simply ask for your money back no questions asked.
I saved more than that after getting tips on how to reduce my monthly phone bill. It really is worth a look.
As for bankruptcy, you may still have to pay back the money owed especially if your partner is on a descent wage, it's just that the govt kinda covers you a bit but you still get blacklisted and owe the money.


When you are declared bankrupt, a bankruptcy trustee will take over your financial affairs. This can include selling your assets and distributing the proceeds among your credit providers. And if your after-tax income exceeds $36,190 (indexed annually and increased for dependents), half of every dollar you earn over this amount can go towards your credit providers.



Even when your bankruptcy is discharged after three years, it can still affect your ability to get credit. Your bankruptcy may be removed from your credit bureau file after seven years, but it is recorded permanently on the publicly accessible ‘National Personal Insolvency Index’, a list of all bankrupts maintained by ITSA.



Who to turn to for help

If you find yourself struggling financially, it can be a good idea to get some professional help. There are a number of free, or low cost, financial counselling services available that can help you get back on top.
The Financial Counsellors’ Association can provide a list of contacts in each state.
The following organisations can also help:
QLD - Credit and Debt Hotline – 1800 808 488
ACT - Care Financial Counselling Service (02) 6257 1788
NSW – Credit and Debt Hotline 1800 808 488
VIC - Financial and Consumer Rights Council (03) 9663 2000
WA - Consumer Credit Legal Service (08) 9221 7066
SA - Community Legal Service (08) 8362 1199
TAS - Anglicare Financial Counselling Service (03) 6234 3510
NT – Anglicare Top End Financial Counselling Service (08) 8985 0000

[Moops]

I believe u can keep a car up to $5000, a friend of mine had a car worth more than this but got a car dealership to say it was only worth $5k and she got to keep it. If you declare bankruptcy for a smallish amount you can get discharged early but it will still remain on your credit file for 7 years and then even after that you are often asked if u have ever been declared bankrupt.

I would really make sure it was your last option, my friend couldnt even get a mobile phone in her name after declaring bankruptcy and getting a mortgage was completely out of the question unless you were prepared to pay double the interest rate.

[Xavier's Mumma]

Hey there,
If u have a secured loan you dont get to keep any car in ur name whether it be worth $500 or even $30.000.

My brother and his girlfriend went bankrupt 9 years ago and they have only now in the last 10 months got credit back so they say 3-5 years but its a lot longer.

[Bubble*Crazy]

:hugs: Leisha. I agree with the others saying if you can avoid it, DON'T!

To answer one of your questions, even something as simple (well maybe not simple :rolleyes:) as insurance can be hugely effected and very difficult to obtain after declaring bankrupt ... even a number of years down the track.

Good luck, and I hope you don't have to go down that path :hugs:.

[our little treasures]

go and see a financial planner or financial counsellor. You may be surprised how much they can help you!

I have to say this is the best piece of advice!!

Find a council one they are in all suburbs and get them to go through your finances, they are run through the government and DONT MAKE MONEY of your misfortune!

Their advice is not to profit themselfs.

A lot of posts said that there is a small fee you pay and you can consolidate your fee's I believe this is thorugh fox simes and the likes and they take you through insolvency part 9 which is the same a bankrupt but you still have to pay the loans back. Also these types of companies go to the companies you have the loan with and say your loan is $10,000 they will offer $5000 and the companies take it because at least they get some money where if you went bankrupt they don't see anything. The problem is they make you pay the full $10,000 and make a profit on the rest!!

If it is a small amount you can be bankrupt for 3yrs and then legally you are discharged, however banks and other financial places make it as 7 yrs. Although you can still get car loans and house loans but need to use the asset as security. Sometimes a higher deposit is needed.

I have a good friend that just built after their bankruptcy ended even though they went bankrupt with the first house.

While it should be an absolute last resort the only people that can give you that advice is a FINANCIAL councilor not us on bubhub!!

I hope that helps!

[~Chick79~]

Thanks for all your replies! :hugs:

The amount of debt we have is not little.... It is just widely spread!

We have come to the realisation that Bankruptcy is not going to be our solution - we must learn a lesson here and not just run away and possibly ruin everything!

On Tuesday (Monday is a public holiday here) we are going to look for a FP that can maybe help us see the light that is at the end of the tunnel!

[Olismum]

We saw a financial planner and also a tax agent who worked wonders for us and also reduced the amount we pay for child support. I've heard that if you are declared bankrupt that alot of businesses won't employ you and your unable to travel to some countries as well as everything that's already been mentioned. Good Luck, I hope you find a solution soon.

[Olddad]

Please seek out expert but independent advice on what your options are. Some of the social service agencies should be able to put you in touch with an adviser who can give you sound advice that could make all the difference to your long-term finances.

[grecksta]

I agree with ACE1 my husband went bankrupt last yr just before i had our 2nd bubbs we were in a situation though where my husband is on apprenticship money and i wasnt working obviously and we were in debit over our eyeballs and werent sure on how much grocery money we could spend from week to week.. I definatley woldnt go bankrupt for the reason of saving. at least you have the money there to pay off the debit i know it keeps going and it is really depressing and you cant save but least the money is there.. the unfortunate thing with bankruptsy is if there is a joint loan etc in your spouses name the debit will move to that person so now I am in debit 10 thousand is very hard as i am not working trying to get a business together for myself though so i can work while i have the kids i had the bank on to me the other day cas my limit had been over my credit card for soo long and she said i had to pay the over limit i simply cant.. she got narky about it and i told her the max i could pay would be 100 a week -which i might add is really pushing it for me. she didnt like it and kept telling me no thats not enough even after i told her my situation then i got upset and simply told her its 100 a week or i go bankrupt and you get nothing- she changed her tune and accepted the 100 a week.. if you have to you need to be straight with them i should have really only commited to 50 a week so i will be pushed for funds now for a fair while but been pushed has nothing ot do with savings i havent been able to save for years. we live from week to week.

[grecksta]

i must also say here though that after 3 yrs from being in bankruptsy you can apply for an exemption which means that you can apply for loans etc (not that you would want to) but if yur financial situation is better and you want to buy a house or get your business or something... but your name is still; on another list which states your bankrupsy for 7 years also for that list of 7 years businesses have to apply to get that info and apparently not a lot do and not just anyone can acsess this..

Cheers have you watched the secret?