Declaring yourself BANKRUPT!!!

[hitmanlam]

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]

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]

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

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

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

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]

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!

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]

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]

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]

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]

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"

lol
zactly

gg

 

[BradK]

Hitman,
My Dont do it!

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

 

[beamstas]

Hitman,
My Dont do it!

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

Male Prostitute?

 

[nomore4s]

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.

Male Prostitute?

lol

 

[Julia]

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.

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.

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!

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]

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]

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]

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]

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.

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]

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

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]

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]

Further:

1. 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]

Hitmanlam.



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.

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.

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.

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)