When you are in financial trouble, it can feel like you have an elephant on your back – there is a burden you cannot shift.
You can feel completely out of control and that conceding defeat is the only option left. Often, bankruptcy is actually the best option for you and your future, but sometimes it is not.
Before you rush into bankruptcy, you will benefit from learning about the process and alternatives that are available to you. By doing this you understand the path to your financial freedom and how to create a more stable and strong financial base for yourself.
Are You Actually in Financial Trouble?
A few untimely bills can leave us feeling like our finances are out of control. Before you throw your hands up in despair, check whether your finances really are in trouble.
Here are three questions to help you determine if you’ve become financially insolvent:
- Are you unable to pay your mortgage?
- Do you have credit card debts you are unable to pay or are only paying minimum interest repayments on?
- Is your weekly income not enough to meet your day-to-day living expenses?
If you answered yes to any of those three questions, it indicates that your financial situation may require measures to stabilise it. If that’s the case, continue reading this article.
I’m In Financial Trouble – What Options Do I Have?
There a number of options to pull yourself out of financial insolvency, including informal debt negotiations, personal insolvency agreements, debt agreements, and declaring bankruptcy.
Informal debt negotiations: Instead of defaulting on your loans immediately, you can negotiate with your creditors to see if you can reduce the amount owing or decrease the interest rate on your money owed. Companies would rather receive a small amount of something then a large piece of nothing. This makes it likely that they will be willing to work with you and come to an agreement that eases your financial situation. For example, banks are often willing to negotiate over credit card and mortgage repayments.
Debt agreements: These are like informal debt negotiations, but you are arranging a legally binding arrangement with your creditor. A creditor may recognise that you cannot pay your debt in full and be willing to accept an amount you actually can afford.
Declaring bankruptcy: Bankruptcy is the formal process of separating yourself from your debt obligations. If you have no way of paying back your creditors, this is often your final option. While it does get you out of your obligations, it can make it more difficult to borrow money in the future.
Okay, I Need to Declare Bankruptcy – What Do I Do?
Declaring bankruptcy can be an intimidating process filled with forms and criteria. In reality, it is a relatively simple process comprising four tasks:
- Complete a debtor’s petition form, ensuring you have fully completed all relevant sections.
- Complete a statement of affairs form, ensuring you have fully completed all relevant sections.
- Ensure you have read, understood and signed the prescribed information, located in the debtor’s petition form.
- Send your application to the Australian Financial Security Authority.
For a more detailed review of how to declare bankruptcy and tailored assistance, you can contact a qualified expert at Revive Financial and build a new beginning.
Bankruptcy is a New Beginning – Your Next Step to Financial Freedom
Once you go through bankruptcy, you can put all your focus on building a brighter and more stable future for yourself. Thinking with a level head is crucial to getting back to financial freedom. As this can be very difficult when you are under immense financial pressure, it is beneficial to consult a qualified expert to assess your financial position and help you determine your best options. Revive Financial helps people get back on their financial feet, contact 1300 117 256 to discuss your financial options today.