Declaring yourself BANKRUPT!!!

[cuttlefish]

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

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.

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.

 

[hitmanlam]

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.

 

[hitmanlam]

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?

 

[waza1960]

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

 

[cuttlefish]

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.

 

[hitmanlam]

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!

 

[Garpal Gumnut]

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.

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

 

[gooner]

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.

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.

 

[drsmith]

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.

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.

 

[Trembling Hand]

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.

 

[nomore4s]

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.

 

[tech/a]

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!

 

[awg]

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

 

[tech/a]

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.

 

[beamstas]

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!

 

[moXJO]

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

 

[Buckeroo]

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

 

[GBS]

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.

 

[Prospector]

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!

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?

 

[grace]

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??