# Declaring yourself BANKRUPT!!!



## hitmanlam (28 August 2009)

Hi all,

I'm currently in debt by $50,000 due to a bad investment scheme.  I was just wondering what are my options right now.

Can I declare myself bankrupt to whipe the slate clean.  Is this a viable option?

Also, what are the pros and cons of doing this?  Is it true that you will never be able to get a loan again.

I just want to start all over again!


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## Garpal Gumnut (28 August 2009)

If it was due to a bad investment scheme, don't.

If it was due to you, do.

Bankrupts are a necessary part of our economy.

Clears the slate mate.

gg


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## swm79 (28 August 2009)

hitmanlam said:


> Hi all,
> 
> I'm currently in debt by $50,000 due to a bad investment scheme.  I was just wondering what are my options right now.
> 
> ...




DO NOT do it... call the people and try to arrange leniency etc etc try anything before you go down that route... there are STRICT laws governing your finances and i suggest you read this:

http://www.itsa.gov.au/dir228/ITSAWeb.nsf/DOCINDEX/Bankruptcy-%3EBankruptcy+Overview?OpenDocument

before you even consider it


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## moXJO (28 August 2009)

hitmanlam said:


> Hi all,
> 
> I'm currently in debt by $50,000 due to a bad investment scheme.  I was just wondering what are my options right now.
> 
> ...




Nooooo don't do it. It can become a nightmare. Search out other options first. itsa are the devil incarnate.


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## hitmanlam (28 August 2009)

swm79 said:


> DO NOT do it... call the people and try to arrange leniency etc etc try anything before you go down that route... there are STRICT laws governing your finances and i suggest you read this:
> 
> http://www.itsa.gov.au/dir228/ITSAWeb.nsf/DOCINDEX/Bankruptcy-%3EBankruptcy+Overview?OpenDocument
> 
> before you even consider it




Hi swm.  

Ok.  Here's the exact situation.  Before the GFC, I borrowed $50,000 unsecured loan from CBA at 16% annum.  I then invested it into a certain scheme.  I pretty much lost the lot due to scheme going under.  It was my owe fault.  I should have been aware of the risk involved.  So now I'm stuck with a 50k CBA loan which would probably take me awhile to pay off.

Wouldn't it be easier if I declared myself bankrupt?

Just wondering who should I call to arrange leniency?  Should I talk to the CBA?

And what will the itsa do to me?


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## swm79 (28 August 2009)

hitmanlam said:


> Hi swm.
> 
> Ok.  Here's the exact situation.  Before the GFC, I borrowed $50,000 unsecured loan from CBA at 16% annum.  I then invested it into a certain scheme.  I pretty much lost the lot due to scheme going under.  It was my owe fault.  I should have been aware of the risk involved.  So now I'm stuck with a 50k CBA loan which would probably take me awhile to pay off.
> 
> ...




it really all depends on what your financial situation is... ie. do you own a house, do you have a car, do you own these things outright or are they financed, what is the margin on them 

seriously you dont want to do it. people just think it will clear you of your debts and its an easy way to get out of them - its not!

all of your financial matters will go through itsa, THEY will own your ar$e, litterally. you cant do anything without notifying them... you cant even leave the country without their consent.

trust me, you dont want this.


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## moXJO (28 August 2009)

Talk to a professional about what option to take, before making any major decisions.

itsa are like a bad curry that goes through you. Which is then shoved down your throat, for a second go at going through you again- and so on.


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## Garpal Gumnut (28 August 2009)

swm79 said:


> DO NOT do it... call the people and try to arrange leniency etc etc try anything before you go down that route... there are STRICT laws governing your finances and i suggest you read this:
> 
> http://www.itsa.gov.au/dir228/ITSAWeb.nsf/DOCINDEX/Bankruptcy-%3EBankruptcy+Overview?OpenDocument
> 
> before you even consider it




A necessarily negative response.

Many of the richest people I know have been bankrupt at one time or another.

I followed a mate through bankruptcy.

It was chilling.

gg


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## swm79 (28 August 2009)

also, its not just "ok, i'm bankrupt... see you later creditors" you have to remain in bankruptcy for 5 years!

the banks will probably lay claims in the bankruptcy and fight for their share of the money anyway. so you will be paying it back.

i suggest you call the bank and talk to them about it before you do anything

its a serious issue that will be stamped on ALL financial files for the bankruptcy period

you really dont want this hanging over your head


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## nunthewiser (28 August 2009)

Hey if its good enough for Bondy then its good enough for anyone


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## moXJO (28 August 2009)

Talk to a professional, before you talk to the bank or you might spook them. Don't put it off, the sooner the better.


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## moXJO (28 August 2009)

Garpal Gumnut said:


> A necessarily negative response.
> 
> Many of the richest people I know have been bankrupt at one time or another.
> 
> ...




Wifeys name and trusts are a Godsend to the rich
Just don't let itsa be able to track any strange movements of funds into wifeys name or its asta la vista money.


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## Judd (28 August 2009)

hitmanlam said:


> Hi swm.
> 
> Ok.  Here's the exact situation.  Before the GFC, I borrowed $50,000 unsecured loan from CBA at 16% annum.  I then invested it into a certain scheme.  I pretty much lost the lot due to scheme going under.  It was my owe fault.  I should have been aware of the risk involved.  So now I'm stuck with a 50k CBA loan which would probably take me awhile to pay off.
> 
> ...




I'm tending towards the "don't do it" side of the house.  If you can pay it off, even as you say, taking a long time, then pay off the loan.  It is not forever.  Do you have any assets, any at all, such as car, that you can sell and reduce the loan?  Any mobile phone plans that you can cancel and redirect those payments towards paying the loan.  Don't put the word on the rellies for a loan.  Nothing, even bankruptcy,  is as bad as financial disputes in and between families.

Most of all, do you have a budget?  You are going to need one.

Bankruptcy is OK for the big buggers, they generally have assets stashed away from the trustee.  For the little folk, it's not the best place to be I am told.


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## Prospector (28 August 2009)

Can you change the terms to an Interest only loan?  If the funds were borrowed for investment purposes, then they are tax deductible.  Therefore the Interest payments come off of your taxable income.

Declaring yourself bankrupt puts a choker around you for years; if you do it to avoid paying a Bank loan, then hope you dont ever expect to get a loan for a car, a house, or maybe even your credit card, mobile phone account, electricity account etc etc for a loooong time.


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## Krusty the Klown (28 August 2009)

There is an alternative to bankruptcy you need to explore called a "debt agreement".

 It is a legally binding agreement designed for people at the lower end of the financial spectrum to avoid the horrors of bankruptcy, I believe it is Part X of the Bankruptcy Act.

There are firms that specialise in this sort of thing. One is Fox Symes, they have a good website, have a look at that, I believe they have free consultations.

Another alternative is to seek out a financial counseller in your area, they will know what to do.

From what you have said this could be your best approach.

_Disclaimer: I am not associated with the mentioned firm in any way._


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## hitmanlam (28 August 2009)

Krusty the Klown said:


> There is an alternative to bankruptcy you need to explore called a "debt agreement".
> 
> It is a legally binding agreement designed for people at the lower end of the financial spectrum to avoid the horrors of bankruptcy, I believe it is Part X of the Bankruptcy Act.
> 
> ...





Well, first of all, I have no house, a bomb of a car (worth $3k) and nothing else.  Which is why I thought bankruptcy could be an option since I don't have a lot of assets to lose.

After seeing all these responses though, it doesn't look as easy as I thought it would.  I just wanted my debts to disappear.  Start on zero.  You might say a new life even.  And I was hoping bankruptcy would be the answer.  Obviously not that simple.

Its just painful (very painful actually) the thought of having to work for the next  2-3 years to pay off a debt and see nothing at the end.

Ok.  So maybe Im asking the wrong question or approaching this the wrong way.  What then would be the best thing I should do NOW???

My unsecured loan is at a pretty high rate.  (16%).  Maybe I should consolidate the loan into a lower interest loan?  Is there any way I can get a lower rate on my loan?  I.e  Is there any concessions that a bank will provide to a person who's struggling to pay off?

I could sell my car.  That would reduce my loan from 50k to 47k.  Lol.  You need a bit of humour in times like these.


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## investorpaul (28 August 2009)

hitmanlam said:


> Well, first of all, I have no house, a bomb of a car (worth $3k) and nothing else.  Which is why I thought bankruptcy could be an option since I don't have a lot of assets to lose.
> 
> After seeing all these responses though, it doesn't look as easy as I thought it would.  I just wanted my debts to disappear.  Start on zero.  You might say a new life even.  And I was hoping bankruptcy would be the answer.  Obviously not that simple.
> 
> ...




As others have mentioned even if you declare bankrupt the bank will still win. In Australia you the slate isnt wiped clean and you dont start from zero. The court will make a ruling that you are to pay x% of your income towards the loan, they may not make you pay the whole 50k but they would hit you up for a fair wack of it. 

In addition it will be hell trying to get contracts for phones, electricity, etc and you can wipe away the possibility of getting any other loan for 5 if not 10 years (unless you land a killer job in the meantime).

As others have mentioned it is best to get independent financial and legal advice, although I would imagine it is possible to approach the bank mention the situation (clearly and admit where you went wrong). You must tell them that you are committed to paying the loan but 16% is too high and you would like it reduced. Even if it was reduced to 10% the bank would be making a massive margin so they should budge a bit. Alternatively ask if they could suspend the interest component on the loan for a while (without them adding it to the loan balance). if this is even for 3 or 6 months your repayments for that period will go 100% towards the principal.

I hope it works out but as I mentioned you should get independent advice first.

Bankruptcy is not easy, nice or over quickly. You would be best served trying to pay the loan out yourself. How much are you currently paying towards it per week? and how much exra could you pay (if you had to)?


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## trainspotter (28 August 2009)

My understanding of the banking act is that credit card debt up to $20,000 is unenforceable. Solution is to go and get 3 credit cards with a 20k limit each and pay off the personal loan. Don't make any payments on the CC's and VIOLA ... unenforceable and no bankruptcy required. You will end up with CRAA violations and will not be able to borrrow money again for at least 7 years but the same instance is applicable if you go bankrupt.

*Now this is not to be considered as financial advice and I would not recommend this strategy AT ALL !!*

Go and see the lender involved and come to a debt resolution for the loan. Explain your position and they will rather stretch you out to keep the loan viable over a longer period of time so thusly they will be generating income from the "bad debt"

DO NOT UNDER ANY CIRCUMSTANCES APPLY FOR BANKRUPTCY.

Circumstances could change over the period of the loan for the better for yourself and you may find that you can pay it off. I am very startled that you managed to obtain 50k as a personal loan without security??? Normal practice is only up to 20k ... reason, see above.

*Now this is not to be considered as financial advice in any way shape or form and it is entirely up to you as to which way you want to proceed.*


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## nunthewiser (28 August 2009)

Not ONE entrepeneur here whatsoever ! 

im shocked actually 

personally i reckon go get a personal loan for the largest amount possible , book up ALL credit cards , book up  anyting you can ........... NON SOLID reposessable assets which can be sold for cold hard cash

go on dole 

kick back for the THREE YEARS with no loans , no job NO REPAYMENTS and live on your unsecured monies for exra spending money .......

hell m8 . even go get a doctors note and go travel around australia for 3 years ........

in 3 years time , deposit a portion of your squirreled away cash in a bank you HAVENT stung as yet and go get another basic job , create a regular income for 3-6 months and apply for a credit card ........... you are now back as a credit assesable entity 


enjoy ya holiday 



please take above comments as merely an alternative view from a freewheelin nun that often drinks and cares not about any ramifications that may occur if one was silly enough to follow my thoughts ...............

but hey the plan sounds mighty cool


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## Prospector (28 August 2009)

Not sure if this applies in all states, but in SA you cannot even register to bid on an auction if you are a declared bankrupt.


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## nomore4s (28 August 2009)

I think you should try every avenue you can before going bankrupt as you will probably find it will hamper you for longer & in more ways then just coming to some sort of payment agreement with the bank.

I would seek some expert advice from somewhere and go from there, but in saying that if it was me I would just work on paying it back as fast as possible while still trying to educate myself on investing and if possible saving a little bit up for a rainy day. That way when you have it undercontrol you will have a better plan to somehow make that money back.

Unfortunately you have made a mistake and will now have to pay the price for that error one way or another. But trust me, alot of people (I for one) have been in your situation or worse and come out the other end the better for it. 

Good luck


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## nunthewiser (28 August 2009)

p.s for a first time bankrupt the term is 3 years insolvent . WHICH can be cut short after 6 months if one can give a good reason too ......

just perusing a few parragraphs at present and may start transferring assets shortly 

anyone wanna lend me some cash ?


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## Krusty the Klown (28 August 2009)

hitmanlam said:


> Lol.  You need a bit of humour in times like these.




Good, you have the right attitude, I have come across people in your situation frequently, and it is not a situation you cannot get out of.

Bankruptcy will wipe your slate clean, but as mentioned puts a lot of restrictions on you. For example you will not be able to get loans for a while. 

If you go in to bankruptcy it will affect ANY account of credit. So you would find it difficult to get a Telstra land line phone account, mobile account, electricity to your home account, renting a house etc. So the effects are far reaching. However, after the bankruptcy period you can repair your credit rating.

You need to do some research, its all on the web, and explore ALL possible ways out of this.

If you see a financial counseller, or one of the firms specialising in insolvencies, they will show you the way. I believe firms like Fox Symes don't actually charge you, they get paid a fee by the government or a commission from the lender (if necessary). 

Your lender would prefer you pay off the debt at a cheaper rate over a longer period than get nothing at all by you going bankrupt. I've seen it happen. Particularly in your case where you have no recoverable assets.

You need to talk to your lender, they will welcome the call, believe me. They have special departments for this sort of thing it is so common. You will be surprised how friendly they will be.

Definitely start looking to refinance at a cheaper rate.

Try here:

http://www.ratecity.com.au.

Start googling everything you can about bankruptcy in your state, debt agreements, financial counsellers. The answers are all on the net. 

At least talk to a counseller or even a solicitor, don't just forget about it.


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## nomore4s (28 August 2009)

nunthewiser said:


> enjoy ya holiday




lol, yeah you could get a holiday alright, at her majesties expense with room & board thrown in


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## trainspotter (28 August 2009)

The other thing I am finding Rucking Femarkable is that you were the one that got yourself into this financial mess and want to take the easy way out? Did you not have an escape route planned when you put this financial noose around your neck? You borrowed 50k in good faith to pay it back. The bank loaned you 50k in good faith EXPECTING you to pay it back ! They would have performed a Debt Servicabilty Ratio equation on the dealing knowing you had the capacity to pay it back? Now the investment has turned South you want to go BANKRUPT? Would you not have had to pay the P&I back on the loan anyhow regardless if the "investment vehicle" you chose hit the brick wall? Dunno, still getting over the claimed fact Commonwealth gave you 50k unsecured??


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## Julia (28 August 2009)

nomore4s said:


> lol, yeah you could get a holiday alright, at her majesties expense with room & board thrown in



Which would be appropriate for such amoral action imo.



trainspotter said:


> The other thing I am finding Rucking Femarkable is that you were the one that got yourself into this financial mess and want to take the easy way out? Did you not have an escape route planned when you put this financial noose around your neck? You borrowed 50k in good faith to pay it back. The bank loaned you 50k in good faith EXPECTING you to pay it back ! They would have performed a Debt Servicabilty Ratio equation on the dealing knowing you had the capacity to pay it back? Now the investment has turned South you want to go BANKRUPT? Would you not have had to pay the P&I back on the loan anyhow regardless if the "investment vehicle" you chose hit the brick wall? Dunno, still getting over the claimed fact Commonwealth gave you 50k unsecured??



Pretty much my reaction too, TS.


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## tech/a (28 August 2009)

Been very close twice.

Avoid it at all costs if possible.
If you owe enough OR you have no assets then the BANK has a problem and will negotiate.
If you have assets then you'll need to liquidate.
Dont go Bankrupt!

$50k isnt a lot (I know its the world to you).
But if the bank can see a way of repayment they may well work with you.

Id call Ernst & Young
They handled both of mine and were hard nosed impartial negotiators.
Dont be bullied!
Remember they cant get blood from a stone,so remain approachable and understanding of their position,spend time with their rep and become a human face NOT a $50k debt.
Go see them find out the EXACT person dealing with it.
Dont avoid discussion.
Ask for them to suggest options.

16%!!!!!!! how on earth did you get talked into that!

Thats as bad as the Bad investment 2 at once!

Oh yeh.
if you do go bankrupt AND in say 2 yrs time you find say $20k you can go to he who bankropts you and offer the $20k as full and final settlement in consideration for the removal of all Bankruptcy records.

Mate did it.
Owed AGC finance $330k went B/R and 14 mths later settled for $33k!!!!


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## swm79 (28 August 2009)

Good points Krusty.

You should talk to a professional in insolvency and go through your options with them.

Possible alternatives could be a Debt Agreement Plan or a Personal Bankruptcy Agreement... which reduce the restrictive nature of a complete formal bankruptcy but a professional will be able to tell you exactly what you need to/should do.


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## nomore4s (28 August 2009)

tech/a said:


> 16%!!!!!!! how on earth did you get talked into that!
> 
> Thats as bad as the Bad investment 2 at once!




$50k unsecured that's how! 

It must have been some investment to cover 16%, little wonder it went under as it must have been risky to be able to cover that much interest.


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## swm79 (28 August 2009)

tech/a said:


> Ernst & Young
> They handled both of mine and were hard nosed impartial negotiators.




EY... i worked for them in my younger days. They're good at what they do!

Forced expertise through pressure... only way to go. Good life if you're a partner.... unfortunately, not me.


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## Prospector (28 August 2009)

trainspotter said:


> The other thing I am finding Rucking Femarkable is that you were the one that got yourself into this financial mess and want to take the easy way out? ??




Yup, that peeves me a great deal too.  And this  







> I just wanted my debts to disappear. Start on zero. You might say a new life even.




Wouldnt we all....


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## swm79 (28 August 2009)

nomore4s said:


> $50k unsecured that's how!
> 
> It must have been some investment to cover 16%, little wonder it went under as it must have been risky to be able to cover that much interest.




probably one of those turn and burn funds... what was it? a ponzi? 

Timbercorp perhaps????


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## hitmanlam (28 August 2009)

trainspotter said:


> The other thing I am finding Rucking Femarkable is that you were the one that got yourself into this financial mess and want to take the easy way out? Did you not have an escape route planned when you put this financial noose around your neck? You borrowed 50k in good faith to pay it back. The bank loaned you 50k in good faith EXPECTING you to pay it back ! They would have performed a Debt Servicabilty Ratio equation on the dealing knowing you had the capacity to pay it back? Now the investment has turned South you want to go BANKRUPT? Would you not have had to pay the P&I back on the loan anyhow regardless if the "investment vehicle" you chose hit the brick wall? Dunno, still getting over the claimed fact Commonwealth gave you 50k unsecured??




Ok.  A lot of things to take here.  First of all, yes, it was 50k unsecured.  I had a stable job at a accounting firm for about 2 years (55k p.a).  They said they needed addition documents for any loan over 35k.  Thats right!  Pretty much anyone with standard job.  (Not even well paid. eg. full time at woolies) can get a loan of 35K.  This was pre financial crisis btw so things might have changed.  My loan was approved at 50k.   I can blame the bank for giving me the loan in the first place but thats like blaming the casino for allowing you to lose your money.  (Maybe not quite the same but you get the picture.)

How about the all the ppl that invested into some forestry scheme or storm financials?  Do u blame the individual or do you blame the ppl that run the schemes?  How are they to know that their investments went sour?  Yes, I admit that it was my fault for not understanding the risk in the first place and now im paying the consequences.

At least I didn't use that 50k on a 3 year world trip and come back home declaring myself bankrupt which I could have done.

I am extremely dissapointed at myself for allowing this to happen but what's done is done.  I can't change the past.

Anyways, I think I'm going to the bank today and notify them of the situation.  Hopefully I can get a discount of the rate or something.  I'll let ya know what happens.


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## Sunder (28 August 2009)

I think it's been briefly touched upon here, but bankruptcy doesn't mean you don't have to repay your debts. 

You can't declare yourself bankrupt (well I suppose you can, but it has no legal standing) - only a court can declare you bankrupt. What you can do is petition a court to declare you bankrupt and ask for the protection that offers. (Which, considering credit laws isn't that much anyway).

If you were say, earning $60,000 a year, with no assets, and a $50,000 debt. You think bankruptcy is an easy way out. The creditors disagree, arguing that if you paid them interest + 10% principle a year, or about $250 a week, you would still be able to live comfortably, then the court might be inclined to deny you bankruptcy, and enforce a debt agreement, garnishing your wages. 

Bankruptcy laws were to stop people who had no chance of ever repaying a debt being mercilessly pursued by creditors. It was not for a person with a difficult debt to "wipe their slate clean" and start again. 

By the way, I am not a lawyer, or anyone else qualified to give advice, this is just my basic understanding of the law from Year 9 and 10 commerce...


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## Prospector (28 August 2009)

hitmanlam said:


> How about the all the ppl that invested into some forestry scheme or storm financials?  Do u blame the individual or do you blame the ppl that run the schemes?  How are they to know that their investments went sour? .




I dont think that was his point, rather that you would consider going bankrupt to avoid the consequences of your decisions.


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## gooner (28 August 2009)

trainspotter said:


> My understanding of the banking act is that credit card debt up to $20,000 is unenforceable. Solution is to go and get 3 credit cards with a 20k limit each and pay off the personal loan. Don't make any payments on the CC's and VIOLA ... unenforceable and no bankruptcy required. You will end up with CRAA violations and will not be able to borrrow money again for at least 7 years but the same instance is applicable if you go bankrupt.
> [




Don't think about getting a job as a lawyer - you would get sued for providing crap (i.e. wrong) advice



swm79 said:


> EY... i worked for them in my younger days. They're good at what they do!
> 
> Forced expertise through pressure... only way to go. Good life if you're a partner.... unfortunately, not me.




I know a PwC partner, a senior one. Good money, but workload is huge, lots of evenings and weekends.  Doesn't see his kids much.  So financially good, but personally not.


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## trainspotter (28 August 2009)

hitmanlam said:


> Ok.  A lot of things to take here.  First of all, yes, it was 50k unsecured.  I had a stable job at a accounting firm for about 2 years (55k p.a).  They said they needed addition documents for any loan over 35k.  Thats right!  Pretty much anyone with standard job.  (Not even well paid. eg. full time at woolies) can get a loan of 35K.  This was pre financial crisis btw so things might have changed.  My loan was approved at 50k.   I can blame the bank for giving me the loan in the first place but thats like blaming the casino for allowing you to lose your money.  (Maybe not quite the same but you get the picture.)
> 
> How about the all the ppl that invested into some forestry scheme or storm financials?  Do u blame the individual or do you blame the ppl that run the schemes?  How are they to know that their investments went sour?  Yes, I admit that it was my fault for not understanding the risk in the first place and now im paying the consequences.
> 
> ...





Sorry to you if it seems that I have come on a bit strong. Good to hear you are going to see the bank to sort it out. I am sure they will be accomodating. If the loan was taken out pre GFC surely some of the principal was paid off? Now I can understand WHY the GFC occured if they are lending this much unsecured with PL's. LOL. Sh!tty position you have got there dude. Best of luck.


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## hitmanlam (28 August 2009)

Prospector said:


> I dont think that was his point, rather that you would consider going bankrupt to avoid the consequences of your decisions.




True, maybe I was hoping to take the easy way out.  But who wouldn't?  Anyone that declares themselves bankrupt is technically taking the easy way out.  Or the "easier" option out anyways.

Trust me, if you were in the same situation as me, you would have considered the same thing. 

Its easy to say you should have done this and you should have done that.  But at the end of the day, it's all should offs.  It can't change the past.  All I can say is that I've certainly learnt my lesson.

Sorry. But know more schemes/shares for me.  I'm sticking to term deposits from now one!!!

And to trainspotter, thats ok mate.  Thanks for your well wishes.

I am a perfect example of why the GFS happened!!!


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## drsmith (28 August 2009)

hitmanlam said:


> Ok.  A lot of things to take here.  First of all, yes, it was 50k unsecured.  I had a stable job at a accounting firm for about 2 years (55k p.a).



What is your capacity to meet repayments on the loan (do you have a job/income now) ?

One option the bank may be willing to consider in your situation (assuming some income) may be to increase the term of the loan so that monthly payments are less. You won't get a lower interest rate though. From an investment perspective that's not how risk/return works.

Also, what kind of scheme/shares? did you get involved with that $50k ?


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## Prospector (28 August 2009)

hitmanlam said:


> True, maybe I was hoping to take the easy way out.  But who wouldn't?  Anyone that declares themselves bankrupt is technically taking the easy way out.  Or the "easier" option out anyways.
> 
> Trust me, if you were in the same situation as me, you would have done the same thing.




Nope, I wouldnt.  I have a loan for an IP that I would love to just disappear because the property market for this investment went sour.  But I am still paying it off and would never think of bankruptcy as a way of divesting the debt..  The break fee for the loan (if I sell it within 5 years) is $45,000 just on its own, and then there is the loan itself!



hitmanlam said:


> Sorry. But know more schemes/shares for me.  I'm sticking to term deposits from now one!!!




Sounds like a good move for now.


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## trainspotter (28 August 2009)

gooner said:


> Don't think about getting a job as a lawyer - you would get sued for providing crap (i.e. wrong) advice.




Thanks Gooner for the heads up on the lawyer situation and for only quoting part of my post. Didn't you used to work in a bank cracking 225k a year in an analysts position? Maybe you can offer hitmanlam the CORRECT advice then? 

Was what I typed as tongue in cheek as nunthewisers response with the cash withdrawal non payback system? (Good system too I thought) Good to see that what is written in here is actually being read by at least someone.  No matter how misguided their intentions seem to be. LOL.


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## nunthewiser (28 August 2009)

trainspotter said:


> [ Was what I typed as tongue in cheek as nunthewisers response with the cash withdrawal non payback system? (Good system too I thought)  .





hey i was totally sincere 

already got it planned and wheels in motion , all i need is the go ahead from you as to a cook position on the boat paid in cash or fish so i can make a quick getaway once i sign the papers


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## hitmanlam (28 August 2009)

nunthewiser said:


> Not ONE entrepeneur here whatsoever !
> 
> im shocked actually
> 
> ...





Looking back at that previous post.

LOL nunthewiser.  Oh the things I could have done......

And to think that I could have done all that and be in the same situation as I am in right now!!!


----------



## moXJO (28 August 2009)

nunthewiser said:


> so i can make a quick getaway once i sign the papers




Your media name can be the flying nun


----------



## Krusty the Klown (28 August 2009)

drsmith said:


> You won't get a lower interest rate though. From an investment perspective that's not how risk/return works.




Some lenders *will* decrease the interest rate, to ensure they get their money back by making the repayments less of a pressure on the borrower's cash flow.

Have seen it happen numerous times. Depends on the lender though.

By increasing the term and decreasing the rate, they can calculate so they get the same return as contracted, just over a longer period.

Paramount importance is getting their principle back. Then they focus on the return.


----------



## trainspotter (28 August 2009)

nunthewiser said:


> hey i was totally sincere
> 
> already got it planned and wheels in motion , all i need is the go ahead from you as to a cook position on the boat paid in cash or fish so i can make a quick getaway once i sign the papers




LOLOL .... paid in fish is righteous !! Only if you look like the Nun in the picture. THEN ... Welcome aboard Chef Nun. That is me at the wheel by the way !


----------



## Krusty the Klown (28 August 2009)

nunthewiser said:


> hey i was totally sincere
> 
> already got it planned and wheels in motion , all i need is the go ahead from you as to a cook position on the boat paid in cash or fish so i can make a quick getaway once i sign the papers




Sounds like you're a qualified financial planner!!!!:


----------



## hitmanlam (28 August 2009)

Just had a quick look at the ratecity.com site.

Low rate credit card going at 11%.  Not bad.......

Just gotta get that credit card application approved first.  lol.


----------



## white_goodman (28 August 2009)




----------



## gooner (28 August 2009)

trainspotter said:


> Thanks Gooner for the heads up on the lawyer situation and for only quoting part of my post. Didn't you used to work in a bank cracking 225k a year in an analysts position? Maybe you can offer hitmanlam the CORRECT advice then?
> 
> Was what I typed as tongue in cheek as nunthewisers response with the cash withdrawal non payback system? (Good system too I thought) Good to see that what is written in here is actually being read by at least someone.  No matter how misguided their intentions seem to be. LOL.




Credit card debts are legally enforceable as are most debts. There are some exceptions such as where entered under duress, or where you can prove the bank knew would be unable to pay them. Oh and still enforceable if you cross your fingers whilst signing the docs.

And I think the $225k came from you not me.........

As for practical suggestions, banks will renegotiate both on principal and interest. CBA will want to get as back as much as it can, but will want to avoid a bankruptcy situation. They will look at the situation in terms of financial return (what is our best outcome), precedent (do not want to set a bad precedent, such as writing off all the debt) and publicity (do not want generally).


----------



## knocker (28 August 2009)

hitmanlam said:


> Hi all,
> 
> I'm currently in debt by $50,000 due to a bad investment scheme.  I was just wondering what are my options right now.
> 
> ...




Gees mate it is only 50k. I was in debt to the tune of 1.5 million some years back. I managed to crawl my way back to the top without declaring backrupcy. That is the last thing you want to do.


----------



## Buckeroo (28 August 2009)

trainspotter said:


> The other thing I am finding Rucking Femarkable is that you were the one that got yourself into this financial mess and want to take the easy way out? Did you not have an escape route planned when you put this financial noose around your neck? You borrowed 50k in good faith to pay it back. The bank loaned you 50k in good faith EXPECTING you to pay it back ! They would have performed a Debt Servicabilty Ratio equation on the dealing knowing you had the capacity to pay it back? Now the investment has turned South you want to go BANKRUPT? Would you not have had to pay the P&I back on the loan anyhow regardless if the "investment vehicle" you chose hit the brick wall? Dunno, still getting over the claimed fact Commonwealth gave you 50k unsecured??




Ain't it the truth, but I have to sympathize. Young people are being bombarded with buy this, buy that, invest in this, invest in that etc by companies knowing that these people have no experience & are going to get suckered. Even the banks are targeting young people to leverage investments. Its a croc.

Funny really, Krudd & his goons have done the same thing - sad really.

Anyway hitmanlam, I agree that you should get some advice on restructuring the loan and a plan to pay it off - you might be surprised, it may not be too painful. And the loss can eventually be used to offset any gains in the future although you probably won't feel like investing for some time.

Good luck

Cheers


----------



## Garpal Gumnut (28 August 2009)

I think bankruptcy is good because I can pick up gear cheaply from bankrupts.

gg


----------



## hitmanlam (28 August 2009)

knocker said:


> Gees mate it is only 50k. I was in debt to the tune of 1.5 million some years back. I managed to crawl my way back to the top without declaring backrupcy. That is the last thing you want to do.




True.  50k might sound like nothing to you.  But it's all relative.  50k is like 3 years worth of savings or essentially 3 years of my life.

To rupert murdoch, $10 mil might sound like nothing.  It just all depends on how much income u can generate.

For a 24, turning 25 year old earning normal average wages, 50k is a whole heap of money.


----------



## hitmanlam (28 August 2009)

Buckeroo said:


> Ain't it the truth, but I have to sympathize. Young people are being bombarded with buy this, buy that, invest in this, invest in that etc by companies knowing that these people have no experience & are going to get suckered. Even the banks are targeting young people to leverage investments. Its a croc.
> 
> Funny really, Krudd & his goons have done the same thing - sad really.
> 
> ...





Thanks buckeroo.  I am going to talk to some ppl and try to restructure this loan.  

I've gotta think positive I guess.  No one likes to lose money but if this is the worst thing thats happens in my life, then I will gladly take it.

At least I learnt my lesson on the dangers of leverage before I had the wife, kids and the house!

Going to set up a goal right now.  If I start paying it off now, I'll be debt free by the age of 27-28.   Not bad.  Only thing is that 3 years seems like such a long way away!


----------



## Buckeroo (28 August 2009)

hitmanlam said:


> True.  50k might sound like nothing to you.  But it's all relative.  50k is like 3 years worth of savings or essentially 3 years of my life.
> 
> To rupert murdoch, $10 mil might sound like nothing.  It just all depends on how much income u can generate.
> 
> For a 24 year old earning normal average wages, 50k is a whole heap of money.




For what its worth Hitmanlam, I'm sure most of us here have had similar lessons. Personally, I've had 2, 1990 & 2000 (tech crash) and you would think I would have learned something after 1990!! But each time put me back at least 2 years.

I think that's what knocker was trying to tell you, pick yourself up, take the knocks & get back into the saddle as soon as you can - you will be a better investor after this guaranteed.

Cheers


----------



## Garpal Gumnut (28 August 2009)

hitmanlam said:


> True.  50k might sound like nothing to you.  But it's all relative.  50k is like 3 years worth of savings or essentially 3 years of my life.
> 
> To rupert murdoch, $10 mil might sound like nothing.  It just all depends on how much income u can generate.
> 
> For a 24, turning 25 year old earning normal average wages, 50k is a whole heap of money.




hitman, you need to be age appropriate in your aspirations.

Murdoch is a helluva lot older than you and would swap places with you today for all his millions.

50k being enormous for a 24yo is normal mate. NORMAL

gg


----------



## Krusty the Klown (28 August 2009)

Buckeroo said:


> And the loss can eventually be used to offset any gains in the future although you probably won't feel like investing for some time.




That's a good point Buckeroo.

You have $50K of capital losses that you can use to offset any future capital gains. Future tax savings.

Also the interest you are paying is still tax deductible. So you should still declare the interest on your tax return. This should help in some way pay off some of the debt.


----------



## Krusty the Klown (28 August 2009)

Garpal Gumnut said:


> hitman, you need to be age appropriate in your aspirations.
> 
> Murdoch is a helluva lot older than you and would swap places with you today for all his millions.
> 
> ...




And Murdoch inherited the majority of his wealth, he did not start from scratch. It is relatively easy to make money when you already have it. 

It is much harder to make money when you start with none.


----------



## Glen48 (28 August 2009)

Don't worried there will be a lot more once ti bubble pops so no one will care about a lousy 50K when there are thousands under water you will be small fry.
By the time you get out houses will be cheap so any money you lost you can pick up is a cheap house but wait several years before you buy.


----------



## hitmanlam (28 August 2009)

Krusty the Klown said:


> That's a good point Buckeroo.
> 
> You have $50K of capital losses that you can use to offset any future capital gains. Future tax savings.
> 
> Also the interest you are paying is still tax deductible. So you should still declare the interest on your tax return. This should help in some way pay off some of the debt.





Can you claim interest on the loan as a deduction against your wage income.  I thought u can only offset the interest on capital gains.  E.g  Gains on investment property, share etc and not wage income.  Cause that would be awesome if I could!


----------



## Krusty the Klown (28 August 2009)

hitmanlam said:


> Can you claim interest on the loan as a deduction against your wage income.  I thought u can only offset the interest on capital gains.  E.g  Gains on investment property, share etc and not wage income.  Cause that would be awesome if I could!




If your investment was one that generated ordinary income and not just capital gains income, then you can claim the interest as a deduction against your salary or wage income.


----------



## Cartman (28 August 2009)

firstly Hitman .... my sympathies for your predicament ---- i might suggest that many here who are giving u their unbridled depth of wisdom may never have been in the position of losing pretty much everything they own in one fell swoop --- therefore i would suggest u take on board what suits and work out your own plan of attack 







hitmanlam said:


> I've gotta *think positive* I guess.  No one likes to lose money but if this is the worst thing thats happens in my life, then I will gladly take it.




1st step taken ---- and a commendable one  




hitmanlam said:


> At least I *learnt my lesson on the dangers of leverage* before I had the wife, kids and the house!




in fact the best time to take on large risk is when u r single -- so well done on that as well 




hitmanlam said:


> Going to set up a goal right now.  If I start paying it off now, I'll be *debt free by the age of 27-28*.   Not bad.  Only thing is that 3 years seems like such a long way away!




exactly ---- 3 years is cr@p all in the overall scheme of things for a young fella

U have a steady job and can service the debt quickly --- there is in fact no problem   (3 years is quick trust me !!)

geez i wish id only done 50K on my bad investment decisions   lol ---- 

for what its worth ---- from my point of view, the issue you have to deal with now is whether the bad decision which has set u back 3 years was actually bad, or was it because u didnt know what u were doing ??

in other words ---  have u learned anything from your mistake which will make it "better" next time round?

ie turn the negative into a positive !! ---- name me a great investor/entrepreneur/trader/etc etc  that didnt blow it a coupla times early on their way to their goal 

anyway not preaching, just rambling on after a couple of burbons


----------



## Garpal Gumnut (28 August 2009)

hitmanlam said:


> Hi all,
> 
> I'm currently in debt by $50,000 due to a bad investment scheme.  I was just wondering what are my options right now.
> 
> ...




hitman I've been  reading over all the posts by my fellow asfers and in retrospect feel you are a complete and utter nong for getting yourself in to this pickle at your tender age.

Life is a zero sum game and the rich will get richer on the back of nongs like you who make poor decisions.

I would declare yourself bankrupt.

Do you have any late model De Dietrich ovens in your squalor, that I may buy for a song,  as I am updating my kitchen?

gg


----------



## Cartman (28 August 2009)

Garpal Gumnut said:


> hitman I've been  reading over all the posts by my fellow asfers and in retrospect feel you are a complete and utter nong for getting yourself in to this pickle *at your tender age*.





so GG when did u get yourself into most of your lifes "pickles" ?? --- tender or mature age ?? :


----------



## Garpal Gumnut (28 August 2009)

Cartman said:


> so GG when did u get yourself into most of your lifes "pickles" ?? --- tender or mature age ?? :




lol  life is a pickle, only becomes a problem if it is terminal.

Still have pickles.

gg


----------



## Cartman (28 August 2009)

Garpal Gumnut said:


> lol  life is a pickle, only becomes a problem if it is terminal.
> 
> Still have pickles.
> 
> gg






haha ---- the final pickle is in fact terminal for all of us (dont i know it) ------ 

i still maintain (especially for Hitman and others in his position) that the taste of the pickle and how they deal with the flavour is what is important 

ie if the flavour is not good, rubbishing the pickle maker would represent the narrow/easy view ---- yet taking steps to improve the quality of the pickle would represent a much better end result !!!

one could even produce his "own" pickles and "take control" of his own future "pickledom"


----------



## Garpal Gumnut (28 August 2009)

Cartman said:


> haha ---- the final pickle is in fact terminal for all of us (dont i know it) ------
> 
> i still maintain (especially for Hitman and others in his position) that the taste of the pickle and how they deal with the flavour is what is important
> 
> ...




lol 
zactly

gg


----------



## BradK (28 August 2009)

Hitman, 
My  Dont do it! 

Just put your head down ass up and pay it off.


----------



## beamstas (28 August 2009)

BradK said:


> Hitman,
> My  Dont do it!
> 
> Just put your head down ass up and pay it off.




Male Prostitute?


----------



## nomore4s (28 August 2009)

hitmanlam said:


> 50k is like 3 years worth of savings or essentially 3 years of my life.




Mate 3 years is F-all, it will be over in no time.



beamstas said:


> Male Prostitute?




lol


----------



## Julia (28 August 2009)

hitmanlam said:


> Trust me, if you were in the same situation as me, you would have considered the same thing.



This was addressed to Prospector.
In response, no she would not have considered bankruptcy for a single moment.  She would have worked out how best to manage the consequences of her earlier decision.
(Which you'd be very, very unlikely to have made in the first place, Prospector!)






> I am a perfect example of why the GFS happened!!!



Yes, it seems so.  Hopefully the banks as well as their clients have learned something now.





knocker said:


> Gees mate it is only 50k. I was in debt to the tune of 1.5 million some years back. I managed to crawl my way back to the top without declaring backrupcy. That is the last thing you want to do.



Wow, fantastic effort, knocker.  Congratulations.






hitmanlam said:


> Thanks buckeroo.  I am going to talk to some ppl and try to restructure this loan.
> 
> I've gotta think positive I guess.  No one likes to lose money but if this is the worst thing thats happens in my life, then I will gladly take it.
> 
> ...



Trust me, hitmanlam, in a couple of decades time three years will seem like a millisecond!
Good on you for taking the responsible attitude.
Best of luck.


----------



## trainspotter (28 August 2009)

Garpal Gumnut said:


> I think bankruptcy is good because I can pick up gear cheaply from bankrupts.
> 
> gg




I prefer marriage breakdowns myself ... picked up several hate cries of passion myself. Eager for money (one of the parties) so to speak.


----------



## Garpal Gumnut (28 August 2009)

trainspotter said:


> I prefer marriage breakdowns myself ... picked up several hate cries of passion myself. Eager for money (one of the parties) so to speak.




Still reckon he should bankrupt.

Clean the slate.

gg


----------



## cuttlefish (28 August 2009)

Hitmanlam.  

Whenever someone makes a big mistake that sets them back severely in life they always hope for the mythical clean slate and feel that its difficult to push ahead only to get back to where they started from (or in many cases knowing they will never get back where they started from).

As you get older you'll realise that in the grand scheme of life mistakes, this one is relatively minor but that's not going to help you right now.

Emotionally it can be a very big hurdle to overcome and feel like a very unfair situation when the mistake itself has been as a result of well intended ideas/plans. 

Its difficult for you to see at the moment, but if you strip away the emotional baggage surrounding it you'll realise that paying off that $50k loan is an achievable task and will not set you back too severely in life.  In fact the money management and other skills you learn in applying yourself to paying it back could reap multiples in terms of experience and skill that you would never have developed had you not applied yourself to it.

So firstly accept that the mistake has happened, there will be no 'get out of jail free' pass or wiping clean of the slate, and that your only choice is to push on and overcome it.  

Next, sit down and make out a plan to pay it off.  As soon as you start to make a positive plan to tackle this and take action on it the burden will immediately start to seem smaller and as you get underway you may even derive a sense of satisfaction from overcoming it.

Some things that you may consider putting in your plans could include:

* speak to a financial advisor
* speak to the bank and try to use your current good payment record as a lever to try to negotiate a lower interest rate.
* speak to other banks or financiers to see if they are prepared to refinance the loan at a lower rate based on your good payment record
* making a strict weekly/monthly living budget
* apply for a higher paying job or speak to your boss about whether there's anything you can do that will make you more valuable to the firm and them able to pay you more money (e.g. overtime, getting additional qualifications, taking on additional responsibility etc.).
* look for some part time or weekend work - this could be as simple as bar work or lawn mowing, but you mention you work in an accounting firm - you may be able to do a bit of home book-keeping or bill-paying or or something like that.   
* selling some things that you don't need to reduce the costs of the loan
* if you parents are 'well off' and can comfortably afford it ... maybe they need a few extra odd jobs done around the house on weekends   don't misuse anyone's generousity though - its your mistake.

Tough situation for a young person to be in but the best thing is to bite the bullet and face up to it.  Its a cliche but a lot worse things could happen in life so be thankful its only money.


----------



## Garpal Gumnut (28 August 2009)

cuttlefish said:


> Hitmanlam.
> 
> Whenever someone makes a big mistake that sets them back severely in life they always hope for the mythical clean slate and feel that its difficult to push ahead only to get back to where they started from (or in many cases knowing they will never get back where they started from).
> 
> ...




I wouldn't agree with that mate.

He's 24 for chrissake.

How is he going to attract a mate with all that ole fogie stuff going on in his head.

Knowing his past record he'll probably walk in to a financial adviser who is the next Storm Financial.

Give the bloke a break.

Why should he grind on muesli every morning when he should be nursing a hangover and wondering whether he should sneak out or say say good morning my darling..

This lad needs to go bankrupt and go interstate and start off again, like we all did.

gg


----------



## cuttlefish (28 August 2009)

Garpal Gumnut said:


> I wouldn't agree with that mate.
> 
> He's 24 for chrissake.
> 
> ...




Geez you're right! 

Before declaring bankruptcy though, go to the bank and get another $50k unsecured on top of the current one ... go the casino and put it all on RED (it has to be red ye hear) ... if red comes up you've got your clean slate ... if it does't carry on as per GG's idea. 

Agree about the financial advisor part being a worry - probably should have said seek professional advice - what you'd want is someone who's pretty savvy on how far the banks can be negotiated on this sort of stuff.

Part time bar work is a good way to fund hangovers ... work on one side of the bar the first part of the night, then sit on the other side of the bar spending it for the remainder of the night.


----------



## waza1960 (28 August 2009)

Well hitman I think you should seriously consider a part 10 arrangement/Bankrupcy if you have no assets.Not because it is a easy option but because the purpose of these laws is to help people such as yourself who have made a mistake.There is a lot of missinformation in these posts so I will try and clarify a few things.







> also, its not just "ok, i'm bankrupt... see you later creditors" you have to remain in bankruptcy for 5 years!



The bankrupcy period is now 3 years 







> the banks will probably lay claims in the bankruptcy and fight for their share of the money anyway. so you will be paying it back.



In my experience the banks will not lay any claims for this money it is an unsecured loan which is immediately written off.







> Nooooo don't do it. It can become a nightmare. Search out other options first. itsa are the devil incarnate



Sounds like a bad experience moXJO not my experience with dealing with itsa though







> Declaring yourself bankrupt puts a choker around you for years; if you do it to avoid paying a Bank loan, then hope you dont ever expect to get a loan for a car, a house, or maybe even your credit card, mobile phone account, electricity account etc etc for a loooong time.



You don't have to disclose your bankrupcy status for creditors under approx $3,500 .You can still usually get phone or power accounts.







> As others have mentioned even if you declare bankrupt the bank will still win. In Australia you the slate isnt wiped clean and you dont start from zero. The court will make a ruling that you are to pay x% of your income towards the loan, they may not make you pay the whole 50k but they would hit you up for a fair wack of it.



 Where does this come from if you have a Part 10 agreement you do enter a agreement to partly pay your debt but this can be as low as 15% if you are bankrupt you only have to contribute over a threshold amount aprox 50k atm.


----------



## waza1960 (28 August 2009)

Further:







> You can't declare yourself bankrupt (well I suppose you can, but it has no legal standing) - only a court can declare you bankrupt. What you can do is petition a court to declare you bankrupt and ask for the protection that offers. (Which, considering credit laws isn't that much anyway).



Don't agree although technically you can't declare yourself bankrupt you can fill out the relevant ITSA forms (download from the internet)and DIY.







> I think it's been briefly touched upon here, but bankruptcy doesn't mean you don't have to repay your debts.



In most case it means exactly that although I don't recommend this action lightly. Anyway my


----------



## Cartman (28 August 2009)

cuttlefish said:


> Hitmanlam.
> 
> 
> 
> ...





wise words C/F


Garps --- what r u thinking !!  The Hitman has to learn from his unfortunate mistake ----- taking refuge in a system that eliminates responsibility by declaring bankruptcy will only make him more vulnerable next time --

the more expensive the lesson, the more reward is derived in the long term (assuming due diligence is added to the mix)


----------



## Garpal Gumnut (28 August 2009)

Cartman said:


> wise words C/F
> 
> 
> Garps --- what r u thinking !!  The Hitman has to learn from his unfortunate mistake ----- taking refuge in a system that eliminates responsibility by declaring bankruptcy will only make him more vulnerable next time --
> ...




No mate 

cuttle/f is givng him advice that betrays his 70 or 75 years of experience. That is ok for the cuttle but not appropriate for a 24 year old.

Any setback in your early twenties is huge. The expense is secondary.

This lad needs to engage in more age appropriate activities, lust, adultery, working for Macquarie/Rio Tinto, buying an SS Ute, chasing rich men's daughters etc etc 

Not sitting with gormless CBA bank mangers working out interest rates for gawds sake my blood boils just thinking about ,

Imagine the scenario, ........... as the manager has slipped a bankrupt Storm 80yo out the door in to the Peoples Palace , and in walks hitman, need I go on...................

This lad needs to go bankrupt and flee his responsibilities.

gg


----------



## Buckeroo (29 August 2009)

Garpal Gumnut said:


> No mate
> 
> cuttle/f is givng him advice that betrays his 70 or 75 years of experience. That is ok for the cuttle but not appropriate for a 24 year old.
> 
> ...




Your a naughty, naughty boy Garpul Gumnut  - I suppose though, that is the Queensland way, flee your responsibilities? 

Didn't that guy Beattie do that?

Cheers


----------



## cuttlefish (29 August 2009)

Garpal Gumnut said:


> cuttle/f is givng him advice that betrays his 70 or 75 years of experience.




haha I'm not that long in the tooth.


----------



## moXJO (29 August 2009)

waza1960 said:


> Sounds like a bad experience moXJO not my experience with dealing with itsa .




Yes family and friends over the years have had dealings with itsa so I was able to see first hand. I wouldn't piss on itsa employees if they were on fire. There is one who I would love to mention his name who was the prince of pricks, even had a rep among fellow colleagues. Oh the stories I would love to tell


----------



## hitmanlam (29 August 2009)

Thankyou for the overwelming responses received so far.

Can I say that I was 22/23 when I took out that loan.  I think that is way too young for a person to make major investment decisions in life.  You should be at least 25 before you can take out a loan to invest.  I am a different person to what I was 2 years ago, thats for sure.  Its like yes, I am the same person but I was so young and naive that I feel like it almost wasn't me that made that decision.  At that time in my life, I felt like I was invinsible!  I'm not drawing away any resposibility because I fully accept the consequences.   All I'm trying to say is that I wish someone had stopped or had prevented that young kid from making that poor decision.  Maybe there is problem with the lending system itself that needs to be change.  Cause trust me, there will be another kid down the track that is going to do the exact same mistake as me.  I've certainly learnt my lesson.  I am never ever going to use leverage again.  I'm probably going to stick to term deposits and savings from now on.

Ok.  Onto the responses so far.  The arguments from both sides have been valid and I must say that its has almost become more so of a MORAL ISSUE for me now rather than which is the better decision to make.

I totally get what gg is saying.  Im 24, and I'm only going to be 24 once.  Do I want to spend my youth paying off a loan and working my a$$ off?  Its a bigger cost for me 3 years now rather than the 3 years later down the track when im 80.

But paying off the loan is feasible and with a lot of descipline and thanks to the advice given by fellow asfers, I believe I can pay off the loan in 3 years.  Also, I would avoid the traumas from the itsa for being bankrupt and its the right thing to do.  So it pretty much comes down to this:

- would I rather slug it out for the next 3 years or:
- do I want to deal with the itsa for the next 5 years and deal with the consequences associated for being bankrupt.

Which one will "cost" more.  And the cost I'm talking about here is the INTANGIBLE COST. My head is saying to pay off the loan but my heart is saying to just declare yourself bankrupt.

Morally, I should pay it off but its a high cost for trying to be morally correct.

Has anyone gone through the bankruptcy system before and experienced it first hand?  All I want to know is how bad is it going to be?  Will I be able to live a normal life for those five years or is it going to be so bad that I wish I had just paid off the loan.

HL


----------



## nunthewiser (29 August 2009)

hitmanlam said:


> - would I rather slug it out for the next 3 years or:
> - do I want to deal with the itsa for the next 5 years and deal with the consequences associated for being bankrupt.
> 
> 
> ...




its 3 years also the term of banktruptcy and sometimes can be cut to 6 months for various good reasons 


money and being morally correct is a kind of grey area i reckon personally ....... and all depends on what place they view it from


----------



## BradK (29 August 2009)

The bank would not think in such moral terms. CBA are ba$tards of the highest order. 

But, I applaud your decision. Pay it off and it will be the best $50K education you ever had. 

My brother has been $60k in cc debt for about 7 years now. Ha! HE SHOULD GO BANKRUPT... but he will never learn. 

He wasted his 20s , his 30s - ... and he's about to head into his 40's. Still, he keeps whining about how he wants to own a house someday...


----------



## Tink (29 August 2009)

well at the end of the day its your choice

You either have 3 years of paying the loan

or 5 years of some one watching your every move when it comes to money choices..

I agree with Cuttlefish, take the experience and learn from it, I would pay it off.

You are young, 3 years is nothing and you will probably make some capital gains in the future which you can off set with this loss..I would also find out about the interest if it is tax deductable

I know one person that went bankrupt and it was a 7 years cant do anything experience. I am pretty sure that most creditors will know that you have put yourself through bankruptcy..thats what he went through..

I also agree with Trainspotter about the loan being given out so easily which was the Commonwealth Bank for this guy as well. I must admit I was surprised but I have noticed that he wasnt the first or last that a got huge loan with no reassurance..


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## tech/a (29 August 2009)

> Has anyone gone through the bankruptcy system before and experienced it first hand? All I want to know is how bad is it going to be? Will I be able to live a normal life for those five years or is it going to be so bad that I wish I had just paid off the loan.




You understand the power of using other peoples money.
You dont understand quantification of RISK.

*Your in that position RIGHT NOW. You are NOT quantifying RISK.*

Go bankrupt and you will* LOSE *the ability of using other peoples money.
You wont be able to run your own business
No one will give you credit.
Banks wont give you an overdraft
You wont get a Credit card.
Property will be out of the question.
Leveraging shares in a screaming bull market (If and when it returns--Out of the equation)
You WILL become a member of the 95% of the world who never amount to much.
Difference is you *HAVE A CHOICE*.

You'll learn nothing.
Choose to be the enterpeneur you wanted to be and you may well find that $50k was well invested. You may answer the challenge by being more creative in demolishing the debt. *Youll learn HOW*!

Its easy to be a bum.
Just look around there are 1000s of them.
Entrepenuers??


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## Sean K (29 August 2009)

Can't you pay off this debt with a credit card?


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## outback (29 August 2009)

I'm with GG on this. If your'e a big enough pratt to borrow $50K at 16% interest to invest in a surefire thing, (I'm guessing #7 at Dapto), and you are now considering how to pay it back, even with a job,  then you haven't a snowballs chance in hell of paying it back. Go bankrupt and accept your a failure.


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## moXJO (29 August 2009)

waza1960 gave some very good advice. You need to talk to a professional and find a solution that won't affect your credit rating too much and destroy any chance of further credit. You need to be smart about this and find out what the lowest risk option both mentally and financially is.

This is also one of those moments that should drive you into looking for alternative money streams other than your job. If you are in a major city money is easy. Time to get creative; don't define your next few years as 'the time of debt paying'. Start expanding your focus on making more money on the side.

Forget trying to be moral about this loan. Try and minimize the length, and severity of this situation. You need to work smart and get creative. If you managed to get 50k loan for investment purposes than you must have some ability. Don't crumple into a fear ball at this moment, you don't have a lot to lose (just protect your credit rating as best you can).

I have dealt directly with family and friends going through bankruptcy at great cost. But they all had assets, and it was to do with failed business ventures so it was not pretty and very stressful. You are not in the same position. Find a good professional and get advice. Don't be scared to seek other opinions. But deal with it as soon as possible. You need to be presice about the best way to deal with the debt.


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## waza1960 (29 August 2009)

> Has anyone gone through the bankruptcy system before and experienced it first hand? All I want to know is how bad is it going to be? Will I be able to live a normal life for those five years or is it going to be so bad that I wish I had just paid off the loan.



Unfortunately I have had first hand experience of a Part 10 arrangement and Bankrupcy.Again the bankrupcy term is *3 years*and life will resume pretty much as normal except for some conditions such as you must have a reason if you want to travel out of Australia and if you earn over a certain amount /year (about 50k I think) they will want a percentage.Your credit obtaining ability will be damaged somewhat although not to the extent mentioned in some of the posts, but so what use that to save money and spend only what you have unlike 90% of the population.


> Morally, I should pay it off but its a high cost for trying to be morally correct.



The moral argument here is distorted in my view 







> money and being morally correct is a kind of grey area i reckon personally ....... and all depends on what place they view it from



Totally agree,by entering Bankrupcy you are not avoiding responsibility you are altering it.You still pay a price for bankrupcy and its not easy or to be recommended lightly.


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## Tink (29 August 2009)

cuttlefish said:


> Geez you're right!
> 
> Before declaring bankruptcy though, go to the bank and get another $50k unsecured on top of the current one ... go the casino and put it all on RED (it has to be red ye hear) ... if red comes up you've got your clean slate ... if it does't carry on as per GG's idea.




LOL had to laugh at this one...........if you are going to go bankrupt, may as well make it worth its while..


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## waza1960 (29 August 2009)

> Go bankrupt and you will LOSE the ability of using other peoples money.



Dissagree You will be able to eventually use other peoples money 







> You wont be able to run your own business



Again dissagree of course you can run a business plenty of options available just a few extra issues to deal with.


> No one will give you credit.



some will some won't


> Banks wont give you an overdraft
> You wont get a Credit card.



 Stuff the credit cards and overdrafts this can be a GOOD THING    







> Property will be out of the question.



 eventually will be possible  







> Leveraging shares in a screaming bull market (If and when it returns--Out of the equation)



Again possible with time 







> You WILL become a member of the 95% of the world who never amount to much.



Strongly dissagree a lot of wealthy people have being bankrupt or undergone arrangements on there way to being extremely successfull


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## tech/a (29 August 2009)

Happy to disagree with you.
We are talking with a 23 yr old.
Hardly someone savvy.
We are also talking about a bankruptcy of $50k hardly a significant amount (I know it is to our potential Bankrupt).
This bankruptcy comes about through poor judgement and is soley caused by our friend.
Most of those who bounce back have become so due to factors beyond their control.18% interest rates/A debtor falling over and your one of the domino effects as 2 examples.

Sure he "could" bounce back.
But with bankruptcy recorded on every credit providers computer in the land,I reckon hes way way behind the 8 ball.

But hey go bankrupt. Dont bother me. I'm one that Didnt and Glad I didnt--2wice.


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## trainspotter (29 August 2009)

Yeppers CRAA (credit reference association of australia) will have your name all over it for a period of SEVEN YEARS. Anytime you try and borrow money, even get a telephone line or mobile from Telstra, your name will be RED FLAGGED and due to the GFC, credit providers are not really happy to lend to anyone with CRAA. PERIOD. 

http://www.foxsymes.com.au/bankruptcylaws.htm for legal advice

http://www.itsa.gov.au/ for the government advice.

http://www.dontevergobankrupt.com.au for my advice


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## gooner (29 August 2009)

hitmanlam said:


> I had a stable job at a accounting firm for about 2 years (55k p.a).




Hitman,

One think to consider is your professional career. Not only does bankruptcy look bad, but it has other consequences.   You mention accounting. I think the standard response of the Institute of Chartered Accountants is to exclude bankrupts from membership for three years (based on my very quick view of their website - check if this applies to you).

Not sure if CPA's take the same approach.

Just another thing to think about when you weigh up pros and cons.

Personally, I would try and negotiate with the CBA- take a financial counsellor's advice and see where you get to.


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## waza1960 (29 August 2009)

Bankrupcy the moral argument:

The moral argument is clouded and filtered by the immoral actions that we see depicted in the media everyday i.e money being hidden away, assets transferred,of course these are immoral actions.

However if you made a mistake and you are don't have any assets then Bankrupcy of itself is not immoral or avoiding responsiblity.How can morality even be mentioned regarding banks what a joke? Was it moral to charge 16% on the loan in the first place?If the bank issued the loan unsecured then it understood  the risks hence the 16%.
As far as financial or legal advise I think its a waste of time re the bankrupcy option unless the numbers are substantial enough they generally are of little help in my opinion.They could be of assistance though if you take the repayment option 

Summary: I think its a 50:50 judgement which way you go,its true that 50K / three years to pay it off is doable you just have to decide if thats what you want to do,its also true that bankrupcy is a hassle and not to be taken lightly.
A final suggestion would be to fill out the relevent forms from ITSA (downloadable from their site) try to borrow some money from relatives,take the forms to the bank and tell them that you will be filling for bankrupcy unless you can arrange a final settlement of the loan of maybe 20% of the total it may work .Repayment agreements with banks seldom work in your favour as they still charge interest and still have you hooked, anyway all the best with your decision


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## waza1960 (29 August 2009)

> But hey go bankrupt. Dont bother me. I'm one that Didnt and Glad I didnt--2wice.



Anyone who can avoid bankrupcy are to be commended but you have to weigh up the costs of doing so.I'm not necessarily recommending Bankrupcy just trying to clarify the issues and give a little advise.Sometimes Bankrupcy is the only option.Didn't mean bother you Tech


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## cuttlefish (29 August 2009)

hitmanlam said:


> Which one will "cost" more.  And the cost I'm talking about here is the INTANGIBLE COST. My head is saying to pay off the loan but my heart is saying to just declare yourself bankrupt.
> 
> Morally, I should pay it off but its a high cost for trying to be morally correct.
> 
> ...




I think you're seeing the backruptcy process as a 'clean slate' - but it sounds like there's a lot of restrictions involved there as well - and you will still have to put in effort in going through the process. If there's restrictions on travel how is that going to affect your plans - its pretty common for people in their mid 20's to do a bit of travelling (even if its just the obligatory bali trip etc.).   Also don't underestimate the stigma you might feel - in terms of being a bankrupt - how is that emotionally going to affect you. Before taking this option I'd strongly suggest talking to someone who's experienced it first hand and see what they found good and bad about the experience.

I'm all for any solution you can find that reduces the problem with minimal side effects and it certainly sounds from what waza1960 is saying it could be worth getting a better understanding of exactly what is involved in a bankruptcy arrangement but don't see it as a free pass.



			
				waza1960 said:
			
		

> Totally agree,by entering Bankrupcy you are not avoiding responsibility you are altering it.You still pay a price for bankrupcy and its not easy or to be recommended lightly.




As waza states - he's been through the process and his statement here is pretty clear - its not easy don't take it lightly.

Also consider that you might be able to put the equivalent effort into finding a job that pays $15 to $20k extra a year which would come pretty close to covering the  repayments over a 5 year period (particularly if you can get an interest rate reduction).  That would put you pretty much where you are now and give you a launch pad for an even higher income in three years time.


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## hitmanlam (29 August 2009)

I was previously an accountant down in wagga back when I took out the loan.  The ironic thing now is that sorta work for the CBA now under CFS as an investment operations admin.  Its like 55k gross so its not that great pay.  I was contemplating a career change but I think I have to push that idea back now.

Yeah. It is a 50/50 call right now.  But I think in going to at least try and figure out how to pay of this loan.  Gotta at least try.  If it doesn't work, hey, I can always go bankrupt!!!

Going to consolidate this loan first maybe with a balance transfer into a lower interest loan.

Don't think I'll be considering investing until I pay this loan off.  Any investment would really be considered leveraging because I could really be paying that loan off instead.

I might have to take up a second job......But what?  Something during the night I guess.  I wouldn't mind being a bartender, if I could get that kinda job that is.


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## hitmanlam (29 August 2009)

cuttlefish said:


> Before taking this option I'd strongly suggest talking to someone who's experienced it first hand and see what they found good and bad about the experience.




Yep.  I was really hoping to hear from a fellow asfer who's gone through bankruptcy him/herself.  Was it as bad as what everyone is making it out to be?


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## waza1960 (29 August 2009)

> Yep. I was really hoping to hear from a fellow asfer who's gone through bankruptcy him/herself. Was it as bad as what everyone is making it out to be?



I have, read my posts


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## cuttlefish (29 August 2009)

hitmanlam said:


> Yep.  I was really hoping to hear from a fellow asfer who's gone through bankruptcy him/herself.  Was it as bad as what everyone is making it out to be?




I haven't experienced bankruptcy so can't help you but but as waza states - he has - so its his insight is interesting.


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## hitmanlam (29 August 2009)

waza1960 said:


> I have, read my posts




I must have misread your post.  I thought u were talking about someone u knew went bankrupt.  Sorry waza.  Going to re-read your post now!


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## Garpal Gumnut (29 August 2009)

hitmanlam said:


> I was previously an accountant down in wagga back when I took out the loan.  The ironic thing now is that sorta work for the CBA now under CFS as an investment operations admin.  Its like 55k gross so its not that great pay.  I was contemplating a career change but I think I have to push that idea back now.
> 
> Yeah. It is a 50/50 call right now.  But I think in going to at least try and figure out how to pay of this loan.  Gotta at least try.  If it doesn't work, hey, I can always go bankrupt!!!
> 
> ...




Pay off the loan is good advice mate. Any loan.

A job as a bartender would be good.

I have had some of the deepest conversations with those who follow that calling.

gg


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## gooner (29 August 2009)

hitmanlam said:


> I was previously an accountant down in wagga back when I took out the loan.  The ironic thing now is that sorta work for the CBA now under CFS as an investment operations admin.  Its like 55k gross so its not that great pay.  I was contemplating a career change but I think I have to push that idea back now.
> 
> Yeah. It is a 50/50 call right now.  But I think in going to at least try and figure out how to pay of this loan.  Gotta at least try.  If it doesn't work, hey, I can always go bankrupt!!!
> 
> ...




If you are declared bankrupt, CBA may fire you as well, so you'll be unemployed. I think banks have a rule about keeping your accounts in order - I know my last employer did.


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## drsmith (29 August 2009)

hitmanlam said:


> I was previously an accountant down in wagga back when I took out the loan. The ironic thing now is that sorta work for the CBA now under CFS as an investment operations admin. Its like 55k gross so its not that great pay. I was contemplating a career change but I think I have to push that idea back now.
> 
> Yeah. It is a 50/50 call right now. But I think in going to at least try and figure out how to pay of this loan. Gotta at least try. If it doesn't work, hey, I can always go bankrupt!!!
> 
> ...



You've got a job so you have got nothing to worry about. Just pay the damn thing off.

Try to get better terms by all means but don't mention bankruptcy in any such negotiations.


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## Trembling Hand (29 August 2009)

Just LOL!!

They say banks have no scruples. So a dreamer takes the money puts it on red and loses the lot then wants out at someone else's expense!! 

My god. Get the bank to take you out of the system. Save some poor other bugger from doing business with you in the future.


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## nomore4s (29 August 2009)

drsmith said:


> You've got a job so you have got nothing to worry about. *Just pay the damn thing off.*
> 
> Try to get better terms by all means but don't mention bankruptcy in any such negotiations.




I agree, earning an all right wage, will have the ability to pay the loan off in 3-5 years and still have a life. I really don't see what the problem is besides trying to get out of it with no responsibility.

Just pay it off and get on with your life.


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## tech/a (29 August 2009)

Trembling Hand said:


> Just LOL!!
> 
> They say banks have no scruples. So a dreamer takes the money puts it on red and loses the lot then wants out at someone else's expense!!
> 
> My god. Get the bank to take you out of the system. Save some poor other bugger from doing business with you in the future.




You know what.
You damned right!


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## awg (29 August 2009)

A question from myself

does the system allow persons to declare bankruptcy if they have the capacity to repay?

gent mentions he has a good job, if slightly underpaid

I would be surprised if bankruptcy can be declared on the basis of his debt level, while he is till employed, if he is single without high expenses

May mean quitting job, and that would lead to greater pernury in the short and long term.

Another thing to remember is ones honour should carry a very high price tag

this is not always so when one is young, but becomes more so as one gets older.

I would do everything possible to delay declaring bankruptcy.

I have succesfully negotiated several debts from Insurance claims to about half the amount claimed, including one very nasty and unlucky liability matter.

I hesitate somewhat to put this forward, but I know for a fact, if you are suffering a lot of stress as a result of your situation,( and you well might be), any medical evidence to that effect is a very powerful lever when negotiating with the financial institution.

Ideally you want them to think of you as a person who is desperately struggling to honour their commitments, make good their mistakes and pay the debt in good faith, but might possibly drop the bundle completely, do a runner, and leave them with nothing. This has to be subtly conveyed, not rammed down their throat 

If you are a financial professional, a bankruptcy could be very poisonous for your future career prospects, costing you more in the long run.

You really need to get your negotiating hat on

IMO the best you could realistically hope for is a get the interest rate reduced or even nullified.

I once had to put up for sale nearly all I had, due to over levereging.

I was lucky the market gods did not go against me at the time


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## tech/a (29 August 2009)

It can happen if the Bank forces the issue.
OR
You can declare voluntary bankruptcy.
However Id be surprised if they didn't investigate alternatives given the ability to pay.


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## beamstas (29 August 2009)

Hey this might be a good strategy for me

Go out borrow 50k beef up my trading account

If i fail and lose the lot just go bankrupt and and wipe my slate clean?

So what if i lose 5 or 7 years. Im 20 and won't be buying a house for a few years anyway

Thanks for the advice
See-ya!


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## moXJO (29 August 2009)

you earn 55k I thought you were hard up. Save yourself the headache and pay the loan


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## Buckeroo (30 August 2009)

tech/a said:


> It can happen if the Bank forces the issue.
> OR
> You can declare voluntary bankruptcy.
> However Id be surprised if they didn't investigate alternatives given the ability to pay.




Exactly Tech/A & Awg, I'm no expert either, but I did think as well if you had the ability to pay off your liabilities, you couldn't declare bankruptcy? - you had to be insolvent first?

Anyone know?

Cheers


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## GBS (30 August 2009)

If you feel the only avenue is Bankruptcy and prepared to face the fall out i.e. have to tell them you are going overseas, then do it. Today it is no biggy going Bankrupt as long as you tell them the truth and update any changes. For example if you get a new job paying over the $37K odd they will expect take 50% of anything over that. And these days after discharge there are leading institutions that will lend to you for housing etc. 

Also, the Trustee at ITSA will usually only look into cases where they are told information that is conflicting, or if a lodgment looks strange, i.e. The Bankrupt went out and borrowed many debts and then walks in to go Bankrupt. This could be fraud and if proven could end up costly. They do not have the man power to investigate every case and only major debt or suspicions will be looked at.

Bankruptcies are not the end of life, but always learn from your mistakes and don’t tell the world when you do it. I have been bankrupt previously due to bad investments and I was ill and struggled from the decision of bankruptcy, but after doing it I felt the world lift off my shoulders and I have survived. Never heard a word from ITSA and did not effect my life but for the positive. Don’t take the negativity on board and be happy and remember there will always be people who will judge because they think they are high and mighty.


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## Prospector (30 August 2009)

GBS said:


> If you feel the only avenue is Bankruptcy and prepared to face the fall out i.e. have to tell them you are going overseas, then do it. Today it is no biggy going Bankrupt as long as you tell them the truth and update any changes..




Um,   Which is it, tell them you are going overseas or tell the truth!



GBS said:


> Don’t take the negativity on board and be happy and remember there will always be people who will judge because they think they are high and mighty..




Or perhaps the ones that judge would take it on the chin and with a job earning $50k feel that bankruptcy is not an option?


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## grace (30 August 2009)

I notice that the major increase is in Part X Debt Agreements at the moment through this financial crisis.  That is what ITSA is reporting anyway (although Bankrupty is still going up, but not by as much).  Is there a message in that??


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## waza1960 (30 August 2009)

> If you feel the only avenue is Bankruptcy and prepared to face the fall out i.e. have to tell them you are going overseas, then do it. Today it is no biggy going Bankrupt as long as you tell them the truth and update any changes. For example if you get a new job paying over the $37K odd they will expect take 50% of anything over that. And these days after discharge there are leading institutions that will lend to you for housing etc.
> 
> Also, the Trustee at ITSA will usually only look into cases where they are told information that is conflicting, or if a lodgment looks strange, i.e. The Bankrupt went out and borrowed many debts and then walks in to go Bankrupt. This could be fraud and if proven could end up costly. They do not have the man power to investigate every case and only major debt or suspicions will be looked at.
> 
> Bankruptcies are not the end of life, but always learn from your mistakes and don’t tell the world when you do it. I have been bankrupt previously due to bad investments and I was ill and struggled from the decision of bankruptcy, but after doing it I felt the world lift off my shoulders and I have survived. Never heard a word from ITSA and did not effect my life but for the positive. Don’t take the negativity on board and be happy and remember there will always be people who will judge because they think they are high and mighty.



Agree totally its a pity that you have to have personal experience of Bankrupcy to give an accurate perception though


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## waza1960 (30 August 2009)

> Um,  Which is it, tell them you are going overseas or tell the truth!



Both if you go overseas you must tell them.If you declare bankrupcy then you must tell the truth 







> I notice that the major increase is in Part X Debt Agreements at the moment through this financial crisis. That is what ITSA is reporting anyway (although Bankrupty is still going up, but not by as much). Is there a message in that??



Hopefully its a positive for human nature meaning that in a Part 10 you are agreeing to pay back a percentage of the debt rather than full bankrupcy.







> you earn 55k I thought you were hard up. Save yourself the headache and pay the loan



Upon reflection I am inclined to agree if you have only a few years to clear the debt then I think that is the right thing to do,in my case there was simply no choice


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## Julia (30 August 2009)

nomore4s said:


> I agree, earning an all right wage, will have the ability to pay the loan off in 3-5 years and still have a life. I really don't see what the problem is besides trying to get out of it with no responsibility.
> 
> Just pay it off and get on with your life.



I agree.  Why shouldn't you take responsibility for your previous decision?
That's what most people have to do.

Consider how you will feel in a couple of decades time:
on the one hand if you do the right thing, you will know you've accepted the consequences of your own choice and can feel rightly proud of that,
whereas on the other you may always have a sense of shame at having run away from something you could easily have managed.

You have a job for goodness sake.  Just talk to the bank and sort out terms for repayment that you can manage.


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## Tink (31 August 2009)

grace said:


> I notice that the major increase is in Part X Debt Agreements at the moment through this financial crisis.  That is what ITSA is reporting anyway (although Bankrupty is still going up, but not by as much).  Is there a message in that??




Yep, too many people taking on debts they cant afford..

Banks have been giving out money too easily, namingly the Commonwealth Bank it seems..

but then if you had to look at it on the other side, could be alot have lost their jobs


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## tech/a (31 August 2009)

> namingly the Commonwealth Bank it seems..




I had one of their Corporate business managers in the office the other day.
Over a simple lunch we were discussing severe cashflow problems.
In Civil works we have massive projects all requiring forward material purchases and wage payments 3 mths before progress claims begin flowing.
Then of course we have retention of 5% which is ALL profit $$.

So the Creditor debtor hole never fills and the more commercial work you hold on your books the more impossible it is to operate.

Well.
After 60 mins of chatting and pouring over spreadsheets,I have never seen a banker pick up his mobile and have the funds available by the time he left.

Which bank!


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## wayno76 (31 August 2009)

Mate, throw yourself into construction. There's big things happening up here in gladstone. An unskilled labourer is earning 130k you could easily pay that debt off in 18mts or less if you wanted. 10hr days 9 day fortnight. money for jam!


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## moXJO (31 August 2009)

wayno76 said:


> Mate, throw yourself into construction. There's big things happening up here in gladstone. An unskilled labourer is earning 130k you could easily pay that debt off in 18mts or less if you wanted. 10hr days 9 day fortnight. money for jam!




Sounds interesting what kind of construction is going on up there, is it in the mines?


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## Julia (1 September 2009)

This very good Radio National "Australia Talks" programme aired yesterday on Bankruptcy.
Guests include Professor Ian Ramsay.

http://www.abc.net.au/rn/australiatalks/stories/2009/2667343.htm


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## metric (1 September 2009)

i know a bloke that has purposely run up a huge credit card bill with the idea of going bankrupt. 

a few months ago he and his wife sold a house that was in her name..but he paid for. they just bought another house, in her name, and heused the credit card to make many improvements to the home. they went on an overseas trip using the credit cards, and done lots of shopping for luxuries etc.

so now hes maxed out all his cards. and is declaring bankruptcy. he recently asked me if he will get in trouble from itsa for what hes done. i said i was the wrong bloke to ask. he said he wants to protect his wifes house.....and will they trace his CC purchaces and link it to her house, thereby making a link to his bankruptcy and then siezing the property to sell for the benefit of creditiors? i said i dont know, go and get some legal advice.

in my opinion, but i wouldnt tell him, itsa will have a good look, make the link, take the house, and he'll be lucky if he doesnt get jail.

but then, what do i know? lots of people seem to be able to rort the process....


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## tech/a (1 September 2009)

moXJO said:


> Sounds interesting what kind of construction is going on up there, is it in the mines?





The $130k or the Construction Work?
For $130k as a labourer it wont be domestic landscaping or local brickies labourer.
It will be the sort of labouring work you need to pay $130k a year to interest people to apply.
Mind you most of these positions turn out to be $80k when you actually look into it and the "Chinese" whisper has done its job.


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## Tink (1 September 2009)

metric said:


> i know a bloke that has purposely run up a huge credit card bill with the idea of going bankrupt.
> 
> .




..and they are the very people that cry out --  "Australia is becoming a Nanny State' -- but then they want to be Nannyed


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## wayno76 (1 September 2009)

moXJO said:


> Sounds interesting what kind of construction is going on up there, is it in the mines?




Theres comalco alumina refinery stage 2 ramping up again after rio down graded its workforce $4b dollar project 18mts to go. Boyne smelter about 18mts work approx. Theres about 4 LNG plants all to be built over the next five Years starting sometime next year approx $15b. Theres boulder steel just been announced it'll hopefully start within 2 yrs $2.2b plus many more big projects in the pipeline.


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## wayno76 (1 September 2009)

tech/a said:


> The $130k or the Construction Work?
> For $130k as a labourer it wont be domestic landscaping or local brickies labourer.
> It will be the sort of labouring work you need to pay $130k a year to interest people to apply.
> Mind you most of these positions turn out to be $80k when you actually look into it and the "Chinese" whisper has done its job.




The works a hell of a lot easier than shoveling dirt or stacking bricks thats for sure.

 I was working out at comalco as a pressure welder and i was on $150k i know for sure the labourers or trades assistant as they call them were on somewhere between $120-$130k. that will go up as there is a major labor shortage and its going to get a lot worse.

The hardest part of the work was the boredom plenty of standing around doing FA.


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## moXJO (1 September 2009)

tech/a said:


> The $130k or the Construction Work?
> For $130k as a labourer it wont be domestic landscaping or local brickies labourer.
> It will be the sort of labouring work you need to pay $130k a year to interest people to apply.
> Mind you most of these positions turn out to be $80k when you actually look into it and the "Chinese" whisper has done its job.




The construction work, I don't know if I could go back on wages. I've put up a few sheds for the mines before (contract work) and it was good money.


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## Prospector (1 September 2009)

metric said:


> i know a bloke that has purposely run up a huge credit card bill with the idea of going bankrupt.
> 
> a few months ago he and his wife sold a house that was in her name..but he paid for. . he recently asked me if he will get in trouble from itsa for what hes done. ....




I hope so.


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## Sunder (2 September 2009)

metric said:


> i know a bloke that has purposely run up a huge credit card bill with the idea of going bankrupt.
> 
> in my opinion, but i wouldnt tell him, itsa will have a good look, make the link, take the house, and he'll be lucky if he doesnt get jail.
> 
> but then, what do i know? lots of people seem to be able to rort the process....




I think I read somewhere, that there is a provision under the law, that for up to two years prior to the bankruptcy declaration, if the person lived what was considered an extravagant lifestyle, disposed of any property for less than market value, or engaged in gambling or highly speculative activities, and they knew, or should have known they were heading towards bankruptcy, they could be criminally prosecuted. 

Proving it is another matter entirely though...

The thing is, while there are loopholes to get rorts through, if it was "that easy", trust me, we wouldn't have armed robberies, crooks would just screw the bank over legally. 

Some might slip through by leaving immaculate paper trails, but enough would get caught to deter the majority from doing it.


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## waza1960 (4 September 2009)

> This very good Radio National "Australia Talks" programme aired yesterday on Bankruptcy.
> Guests include Professor Ian Ramsay.
> 
> http://www.abc.net.au/rn/australiata...09/2667343.htm




Thanks for the link Julia it was interesting.Broadens ones moral perspective though doesn't it.
The rich hiding behind Trusts,Trustees' excessive fees,Creditors waiting for the debt to reach the threshold then Bankrupting.


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## bullish (19 December 2010)

I'm sorry I can't give advice on the subject... but I was wondering if anyone knows if a bankrupt can trade shares/futures etc and forex? Not to hold them for long periods but in a day trader and swing trading sense?


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## Vicki (19 December 2010)

> but I was wondering if anyone knows if a bankrupt can trade shares/futures etc and forex? Not to hold them for long periods but in a day trader and swing trading sense?




Hi Bullish,
You'd have to check with i.t.s.a. [insolvancy trust services Australia].
They may inform you that whilst you are an 'undischarged bankrupt', for I think 3yrs.
That your assetts have to be declared, including equity in anything you own, & as such may be required to contribute some or all of this 'money' towards your creditors.

As for trading?
Well I believe there is a threshold for what you can earn, depending on your situation.
typically 40-60k I think?

Personally, I'd save yourself the hassle of laying awake at night & let someone else trade for you, on your behalf...maybe??

Again, you would have to seek proffessional advice, as the above could/would be considered 'breeching' the laws?

Hope this helps.

Vicki


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## xenith69 (19 December 2010)

....


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## Julia (19 December 2010)

bullish said:


> I'm sorry I can't give advice on the subject... but I was wondering if anyone knows if a bankrupt can trade shares/futures etc and forex? Not to hold them for long periods but in a day trader and swing trading sense?




Good God, I would hope not!


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## Junior (20 December 2010)

There's plenty of misinformation in this thread.

Waza knows what he's talking about, read everything he wrote.

It sounds like, if you're earning $55k you may struggle to settle with a part x or bankruptcy as you aren't actually insolvent.  i.e. you have the ability to make repayments.

However, if you were to become unemployed, and you have no other assets, you would potentially be a good candidate for a part x.  This means you could settle with the bank for a percentage of the debt.  Under part x, if the bank agrees to a lump sum settlement you are able to then go and earn as much as you want, travel etc.  The risk is that they won't accept your offer, forcing you into bankruptcy and then you would be under the microscope for 3 years.  I think the threshold is around $47k, 50% of any earnings above that level would go to your creditors.

It may be worthwhile speaking to an Insolvency professional to work out the best course of action.

Also, ignore all of the mean posts/personal attacks in this thread.  Plenty of wealthy and successful individuals have been through 1 or more insolvencies throughout their lives.  From reading all of the posts in this forum, most people here have made plenty of poor investment decisions in the past - it's all part of the learning process.

Given time, you will be able to obtain credit again, there's plenty of willing lenders out there.


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## bullish (20 December 2010)

Junior said:


> There's plenty of misinformation in this thread.
> 
> Waza knows what he's talking about, read everything he wrote.
> 
> ...




Can't agree more!!!


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## chrisalex (20 December 2010)

I went bankrupt last April for around $18,000. A few years ago I had to go on a Carer Pension to look after my wife. My income is now around $15,000 pa, and this was the
reason I could no longer cope with credit cards and personal loans.
  Even though we own our home, these loans were unsecured which does make things a little less complicated.
  In my case any amount above $1500 that goes into my bank account, that is not a Centrelink or Commonwealth payment, 'may be' taken by ITSA. It is up to the bank to notify them accordingly.
   During September I bought and sold $1000 in small cap. mining shares with no problem.
   This was no different to what I usually traded. Even though CBA Mastercard was one of my creditors, I believe CBA are reasonably broadminded about the situation. I daresay it might be a different outcome if I dropped $10,000 into Comsec.
   Your credit rating will also be effected for 7 years.
                   I hope this has been a little help,    chrisalex


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## financialdonk (21 December 2010)

If OP is an accountant by profession then things are so out of whack in western society it's not funny.

Too spend 3 years at a tertiary institution learning (and passing) core units on financial responsibility, economics, business ethics etc and then obtain a 50k loan at 16% on a 55k p.a. salary is sheer stupidity! (No offense)

This in itself is a somewhat exceptional incident (not all people studying business/accounting are this irresponsible) - BUT to be able to pass a business course puts the OP in the higher echelon of intelligence in our community (at least top 50%).  Or perhaps this is the problem.  The smartest people think the ownly way to get ahead is by using leverage because it is what all the other smart people are doing.

I hope everyone is going to enjoy living in a deleveraging society for the next generation.

The sad part of the story is the future reality that people who are honest savers are going to have their cash deposits inflated away because they were not aware/left in the dark by the world's need to hit the printing presses.


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## ngardiner (1 January 2011)

financialdonk said:


> The sad part of the story is the future reality that people who are honest savers are going to have their cash deposits inflated away because they were not aware/left in the dark by the world's need to hit the printing presses.




I'm sorry, I am so sick of reading this sort of thing. Honest savers? Where does the interest come from do you think? These "honest savers" are choosing an inflation hedge plus a relatively small but safe return by investing funds with a bank who lends them out. If there is no market for loans there's no interest return. If the response to this is that the bank interest returns are too low - find an institution with a higher return (and lower profit margin). That is NOT the fault of those who are doing the borrowing.

The only difference between a saver and a borrower when looking at it from an investment perspective is that the saver is choosing a very conservative risk approach by utilising funds they have now for investment return. A borrower is utilising deferred income in exchange for paying the interest payments which go to pay those in the former category. When people paint these doom and gloom pictures of leverage today vs whatever point they are using in comparison, they seem to suspend reality in terms of how borrowing actually works - these loans are going to, at some point, return to P & I loans if they didn't start out that way, and equity is built. MOST loans (especially those significant enough to make the leverage graphs look bad by today's standards) are secured against actual assets, and we don't have zero recourse loans here so people aren't just gearing up to walk away. We've just discussed the significance of bankruptcy, it's not like people are doing it for fun.

Finally, the effect on inflation. This seems to grate people to no end. The fact that all of these currencies inflate is no surprise - it happens for so many reasons it's not funny... those collecting income from depositing funds ARE contributing to inflation, and those borrowing them are contributing a lot more. I pose this question - if we're so horribly overleveraged in Australia, and the inflationary effects have 3 side effects - rising interest rates to dampen the leveraging, increased returns to cash investors through higher interest, and increased value of certain fixed assets which are being invested in due to dollar depreciation - how is the sky falling again?


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