Declaring yourself BANKRUPT!!!

[hitmanlam]

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!

 

[Garpal Gumnut]

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

 

[swm79]

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!

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

 

[moXJO]

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!

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

 

[hitmanlam]

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?

 

[swm79]

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?

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.

 

[moXJO]

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.

 

[Garpal Gumnut]

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

 

[swm79]

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

 

[nunthewiser]

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

 

[moXJO]

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

 

[moXJO]

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

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.

 

[Judd]

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?

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.

 

[Prospector]

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.

 

[Krusty the Klown]

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.

 

[hitmanlam]

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.

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.

 

[investorpaul]

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.

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)?

 

[trainspotter]

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.

 

[nunthewiser]

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

 

[Prospector]

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.