What are the pros and cons of bankruptcy? I got into a buy now pay later debt while in a relationship and able to pay it off regularly, now single and renting I'm in over $3000 of debt and cannot pay it off. I owe $2000 on zip and $1000 on afterpay and paying them off is killing me financially. I have very little money after paying rent and bills and find myself basically starving because I cannot afford groceries. I have a teen to feed also. For 6 months I've been trying to make it work but because I'm so broke I find I have to use them again just to afford some food. I already get all the financial help I can.
I've been thinking of applying for bankruptcy but don't understand how it works. Can someone explain it to me like I'm 5.
Bankruptcy
Bankruptcy
Posted in:
Money
8 Replies
My husband's friend has just declared bankruptcy. Their debts were in the hundreds of thousands, though.
What I've learned from them telling me about it is that it's complicated and it depends on your situation.
Every part of his life has been scrutinised, if he'd had any his assets would have been sold, future income affected, can't do certain careers anymore. He also can't do a lot of things without permission and financial boosts - like tax returns or inheritance will be taken. He knows his bankruptcy trustee better than his family right now! So for such a small amount (I know it's not small to you) you'll probably not be in front by doing it.
IMO its not a step to be taken to wipe a small debt. It'll cost you more than you'll reap. Here's the govt site. It'll explain some things - the videos look helpful.
https://www.afsa.gov.au/i-cant-pay-my-debts/bankruptcy/am-i-eligible-ban...
Perhaps try to contact some free financial counselling.
https://moneysmart.gov.au/managing-debt/financial-counselling
My suggestion would be to contact the national debt helpline for free advice. The phone number is 1800 007 007 or they have chat services on their website https://ndh.org.au/
Best thing to do is contact Afterpay and Zippay. Tell them you are in financial hardship and need to close the accounts. Tell them you can only afford x amount per week.
Most companies are willing to work with you if you call them and ask.
https://www.afterpay.com/en-AU/hardship
https://zip.co/au/page/vulnerability-and-hardship
I am looking at bankruptcy as well but my debt is around 70 000. I would not do it if I only had 3 grand debt! I've accepted that I probably won't get a loan ever again.
Don’t do it for $3000! Call them and say ‘financial hardship’ single mother, rental crisis, they’ll make a payment plan, stop interest increasing it, even reduce the debt. You can get on top of this, make the calls, tell them how dire it is. If you declare bankruptcy they lose it all.
It’s not worth it over that small amount. Contact the companies and tell them your situation and they will put a payment plan on them and close them.
If not close then they can set a small amount for you in future like a $200 limit.
Don’t go bankrupt it’s not worth it. The pay later places will put holds on them and ask you what you can afford to pay.
Even if it’s $20 a fortnight it’s better than nothing.