When is Bankruptcy My Best Option

Sunday, February 02, 2014

If you are overwhelmed by debt and feel like there is no way out then Bankruptcy might be your best option. Voluntary Bankruptcy can bring peace of mind and remove enormous stress very quickly. Fresh Start Solutions can help for $395, Ph: 1300 818 575

Often when people think of filing for bankruptcy, they are far more concerned with what it means for them at a personal level than anything to do with the hard cold facts. Like so many things in life we all like to think we are rational and logical, but in reality how we feel about things has a big impact on how we think through our problems. Financial distress is no different. We will struggle with overwhelming debt for years rather than risk the implications of going bankrupt. Its not going bankrupt that's the problem its the idea that we have failed, or even worse other people will find out we have failed.

I help people everyday think through their financial problems and it rarely about the money. For example when some of my clients are faced with bankruptcy, I will ask them about their car. In some cases people owe far more for their car than its worth, in many cases its in excess of $10,000 I will suggest maybe they should consider letting the car go as the numbers just don't work. They will respond with something like, "no I need my car for work." or "I would rather try and keep things the same as much as possible".

I only share that idea because It brings me to the main point of this article, because we are all wired a certain way, if you find yourself thinking about bankruptcy 9 times out of 10 its the right option for you. Why? The answer is simple, we only ever allow ourselves the luxury of thinking about it when we have no other options left, we have maxed out the credit cards, our family can't help anymore there is no where else to turn. In other words just the thought of bankruptcy is generally a sign that its over.

Aside from the emotional implications there are some other ways to know if bankruptcy is your best option. This way is simple, work out how long its going to take to pay off all your debts including interest, if its longer than 3 years then bankruptcy would be a viable option. Some credit card statements you get from your bank predicts how long it will take you to pay your card off at your current rate of payments, its just some algorithm one client told me it would take 83 years! So work it out, you will be surprised how long it may take you, by the way try and factor in possibilities as car trouble or hot water systems blowing up then once you have worked it out, 3 years of bankruptcy may not seem so bad.

You may be wondering what the downsides are to bankruptcy. There is one obvious one and that is you cannot get a loan for a gold fish for the 3 years while you are bankrupt. The second only applies to a very select handful of people and that is your employment may be affected, for example if you are a builder with a license for example, your license will be suspended for the 3 years you are bankrupt. So if you have a job with a special license check that out.

A final word about bankruptcy. Its a very private matter no one needs to know about it, you don't need to go to court, or call the banks it wont appear in the newspaper. In fact the only people that will find out will be the people you owe money to and the people you tell. You will feel like you are the only person that is going through this when in reality over 20,000 people file for bankruptcy every year in Australia. You may also feel like the world will stop turning on its axis once you file for bankruptcy, in reality its just another day in the office for the people you owe money to. If you are worried about your particular circumstances feel free to give us a call at Fresh Start Solutions on 1300 818 575.

Tags: Bankruptcy

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