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Declaring yourself BANKRUPT!!!

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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
 
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 ?
 
hitmanlam said:
Lol. You need a bit of humour in times like these.
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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.
 
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??
 
nomore4s said:
lol, yeah you could get a holiday alright, at her majesties expense with room & board thrown in
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Which would be appropriate for such amoral action imo.

Pretty much my reaction too, TS.
 
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!!!!
 
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.
 
tech/a said:
16%!!!!!!! how on earth did you get talked into that!

Thats as bad as the Bad investment 2 at once!
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$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.
 
tech/a said:
Ernst & Young
They handled both of mine and were hard nosed impartial negotiators.
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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.
 
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? ??
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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.
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Wouldnt we all....
 
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.
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probably one of those turn and burn funds... what was it? a ponzi?

Timbercorp perhaps????
 

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

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.
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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.
 


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.
 
Prospector said:
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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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!!!
 
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).
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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 ?
 

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!!!
Click to expand...

Sounds like a good move for now.
 
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