Sentry Page Protection
Not Necessarily Good Advice
I finally bit the bullet. We were sinking, and sinking fast. Despite our best efforts, we were starting to fall behind on our mortgage and other bills. For thirteen months we had lived on sporadic casual wages, adding a new baby to our family of four along the way. A friend suggested I make an appointment to see a free financial counsellor and after much agonising I did it.
I swallowed my pride and blurted out to this counsellor all our troubles. How we had both lost our jobs, how interest rates kept going up, how baby number three had arrived and how we still didn't have a regular income.
He sat there and listened, so patiently. Then suggested that we file for bankruptcy. He even offered to help us fill out the paperwork. I couldn't believe what I was hearing, I was shocked speechless. I disagreed with his advice and managed to find my voice to tell him so.
Bankruptcy is not an easy way out of debt. It should not be thought of as a "get out of debt free" card.
Even if you are in so much debt that you believe you will never be able to pay it all off, bankruptcy is not the answer. Bankruptcy has very serious ramifications for the rest of your life.
Even a small amount of debt can be a challenge to pay off and will take time so don't be disheartened. This is because you still have to live while you are clearing this debt. You still have to pay for a roof over your head, food on the table and basic clothing and transport. You simply cannot put every cent you get towards paying off the debt. You still need to build an emergency fund - life happens! If you don't have the money to cover "life" you will just get into more debt. Birthdays, Christmas and anniversaries will still happen. If you are not saving for these events regularly then you will either have to go without or get deeper into debt.
Getting out of debt takes time. You need to be methodical: make regular payments (that you can afford) and keep track of how the debt is shrinking. A Payment Push will show you how you can do this faster than you ever thought possible.
Bankruptcy because you see it as an easy way out is purely and simply immoral. Take responsibility for your actions (yes, you are responsible - however you ended up in debt, you did it. You signed the loan papers, extended the credit card limit or over spent or failed to build an emergency fund or didn't think house and contents or motor vehicle insurance was necessary.). And now you have a moral obligation to repay every cent. Filing for bankruptcy may clear this debt (and in the process leave someone else out of pocket, potentially putting them into debt) but it's not teaching you how to live below your means. You are just setting yourself up for repeat behaviours.
While it has been advertised as an easy out for those who are deeply in debt, bankruptcy is not easy. It has serious consequence that will affect your life for years to come. Bankruptcy may stop you from travelling overseas (you must apply to the trustee overseeing your account for permission to leave the country). It can affect your employment. It will affect your standard of living. And it lasts for years - at least three, possibly five and perhaps eight years.
A better way to get out of debt is to firstly accept responsibility (see above). Then you need to make a list of all your debts, every single one of them. Use the Payment Push planning sheet. Then contact each and every creditor and explain the situation to them. Tell them you are trying to avoid bankruptcy and you want to pay back your debt and work out a payment plan with them. And then you have to stick to it.
Can it save your home or car? Maybe, maybe not. You may need to sell assets to help repay your debts. If you reach an agreement with a creditor and stick to it like glue, it should get them off your back. The letters, phone calls and knocks on the door will hopefully stop.
Is this easy? No. Is it the right thing to do? Yes. This is the moral option and best of all I know it works.
I swallowed my pride and blurted out to this counsellor all our troubles. How we had both lost our jobs, how interest rates kept going up, how baby number three had arrived and how we still didn't have a regular income.
He sat there and listened, so patiently. Then suggested that we file for bankruptcy. He even offered to help us fill out the paperwork. I couldn't believe what I was hearing, I was shocked speechless. I disagreed with his advice and managed to find my voice to tell him so.
Bankruptcy is not an easy way out of debt. It should not be thought of as a "get out of debt free" card.
Even if you are in so much debt that you believe you will never be able to pay it all off, bankruptcy is not the answer. Bankruptcy has very serious ramifications for the rest of your life.
Even a small amount of debt can be a challenge to pay off and will take time so don't be disheartened. This is because you still have to live while you are clearing this debt. You still have to pay for a roof over your head, food on the table and basic clothing and transport. You simply cannot put every cent you get towards paying off the debt. You still need to build an emergency fund - life happens! If you don't have the money to cover "life" you will just get into more debt. Birthdays, Christmas and anniversaries will still happen. If you are not saving for these events regularly then you will either have to go without or get deeper into debt.
Getting out of debt takes time. You need to be methodical: make regular payments (that you can afford) and keep track of how the debt is shrinking. A Payment Push will show you how you can do this faster than you ever thought possible.
Bankruptcy because you see it as an easy way out is purely and simply immoral. Take responsibility for your actions (yes, you are responsible - however you ended up in debt, you did it. You signed the loan papers, extended the credit card limit or over spent or failed to build an emergency fund or didn't think house and contents or motor vehicle insurance was necessary.). And now you have a moral obligation to repay every cent. Filing for bankruptcy may clear this debt (and in the process leave someone else out of pocket, potentially putting them into debt) but it's not teaching you how to live below your means. You are just setting yourself up for repeat behaviours.
While it has been advertised as an easy out for those who are deeply in debt, bankruptcy is not easy. It has serious consequence that will affect your life for years to come. Bankruptcy may stop you from travelling overseas (you must apply to the trustee overseeing your account for permission to leave the country). It can affect your employment. It will affect your standard of living. And it lasts for years - at least three, possibly five and perhaps eight years.
A better way to get out of debt is to firstly accept responsibility (see above). Then you need to make a list of all your debts, every single one of them. Use the Payment Push planning sheet. Then contact each and every creditor and explain the situation to them. Tell them you are trying to avoid bankruptcy and you want to pay back your debt and work out a payment plan with them. And then you have to stick to it.
Can it save your home or car? Maybe, maybe not. You may need to sell assets to help repay your debts. If you reach an agreement with a creditor and stick to it like glue, it should get them off your back. The letters, phone calls and knocks on the door will hopefully stop.
Is this easy? No. Is it the right thing to do? Yes. This is the moral option and best of all I know it works.