Bankruptcy - Create a Holistic Solution
It is a common view for people to think that declaring bankruptcy is what you do to extract yourself from debts which you are unable to pay. Whilst these people are correct, there is more to it than that. We would like to discuss today; the outcomes we believe you should be striving to achieve in addition to filing for bankruptcy. To get the best results from bankruptcy we recommend that you seek to tick off all the boxes below.
We will discuss each of these topics and then give you an example to demonstrate your opportunity.
David and Sue had credit card debt and personal loans that they were finding difficult to repay and could not see a way out. Their debts totalled $215,000 between them. They were advised to file for Bankruptcy. They filed for bankruptcy, obtained a bankruptcy number and their credit card and personal loan debt were gone, but this was only part of their solution.
Other parts of their solution were;
They booked an appointment with their Doctor for a check up to make sure there were no medical consequences from the stress they had been through.
They made sure their utility bills and rent were paid up to date and on time to give them financial security and to start rebuilding their credit record.
Sue and David then thought about things that they would like to change in their life and what they can do differently to prevent being caught by insurmountable debt again. They both agreed to have no more credit cards would be a big step forward for them.
They then thought about what they could do to reduce their stress. They had without realising it, lost a lot of their lifestyle that had given them much relaxation prior to the financial stress building up against them. Sue started to get back into her book club and the local drama society. She had stopped going to them to save money. David paid his money to re-join his local soccer club and started to get back into his cross country running. He had given up his sport as he was always feeling too tired. David and Sue also made effort to reacquaint with their friends as they had socially withdrawn due to not being able to afford to go out.
Bankruptcy had greatly assisted them to reduce their stress and improve their quality of life.
They thought about their future direction in life and decided that they would like to start saving for a deposit for a house without putting themselves under financial pressure. They realised bankruptcy had given them a big opportunity by removing their debts.
Sue earned $85,000 per year and David $55,000. – During bankruptcy Sue payed small income contributions whilst David’s wages were totally protected. Bankruptcy protected close to all their wages so as they could live and save.
Sue had $45,000 in super and David had $28,000 when they became bankrupt, giving them superannuation savings between them of $73,000. – Bankruptcy protected Sue and David’s super.
Bankruptcy also protected Sue & David’s cars and household furniture.
Bankruptcy gave Sue and David a great platform to budget and start working towards their financial future. They budgeted to save $23,000 per year towards their house deposit whilst they were bankrupt. They also took comfort knowing that Sue’s employer was paying statutory super of $8,075 to her super fund each year and David’s employer $5,225 to his super fund each year.
They had their plan to be financially secure, live healthier lives and save a deposit for a house whilst they were bankrupt.
They used bankruptcy to turn their lives around. Their plan was to go from having debt of $215,000 to being discharged from bankruptcy in 3 years’ time living a healthy lifestyle, being debt free, having $69,000 towards their house deposit in the bank and having superannuation savings between them of $112,900.
The good news is that they achieved their plan. What a turnaround not only did they change their financial fortunes but also achieved a good lifestyle and wellbeing.
If Sue and David had not utilised bankruptcy, in three years’ time they would have still been in debt, with no savings and under significant stress causing them all sorts of problems.
Bankruptcy is not just about getting rid of the debt it is also about where you want to be in the future and the lifestyle you want to live.
We hope this article has assisted you. We are here to help you understand Bankruptcy. If you would like to discuss your situation give us a call on 1300 794 492 or email email@example.com