4 Things to Consider Before Filing for Bankruptcy

Taking the option of bankruptcy is one of the most serious financial decisions that you can make.  It has far reaching implications that will affect your life for many years to come, and should always be the very last resort when looking for a solution to your financial problems.  Often, there are other avenues that you should explore before deciding to become bankrupt, ones which have a far less significant impact on your credit rating and financial standing.  Here are 4 important things to consider before filing for bankruptcy.

Understanding What You Owe

Many people start considering bankruptcy when they owe a significant sum of money that they are struggling to pay back.  However, filing for bankruptcy shouldn’t be motivated just by how much you owe, but rather on your ability to organise repayments.  There’s no limit on how much you need to owe before you declare yourself bankrupt, and a creditor can make you bankrupt for any amount of over $5000.  Just because you owe a large amount of money doesn’t mean that you should become bankrupt, especially if you can negotiate for longer terms and decreased repayments with your creditors. 

Restricted Lifestyle

If you do decide to file for bankruptcy, your entire life will be seriously affected by the decision.  Some of your assets may be sold off, your entire financial records will be closely investigated, and your financial institution may restrict your accounts and freeze your credit cards.  You will not be allowed to leave the country without the permission of your trustee, and you must disclose your status as bankrupt when applying for any kind of credit.  If you violate these terms, or have been found to have sold off property before your bankruptcy to defeat creditors, you could face up to 3 years in jail.

Explore Other Options

Remember that bankruptcy should always be your absolute last resort.  There are many options to explore before you file for bankruptcy, and many of them are viable ways to get yourself out of dangerous levels of debt.  The first step is to speak to all of your creditors and explain your situation.  Work out a repayment plan with them, and see if they can offer you a lower rate of interest and an extended term on your loan.  Consolidating your debt into one single loan is also a great way to simplify your debt, and allows you to keep track of what you owe with one single monthly payment.

Professional Assistance is Available

Talking to your creditors can be a daunting task, especially if they have already been aggressive in their attempts to recover missed payments.  Luckily, there are a range of debt solutions specialists such as Fox Symes who have years of experience helping Australians to overcome their issues with debt.  A professional consultant will review your situation and help you to decide which option will be the best for your personal needs, and can often help you to avoid bankruptcy.  However if there is no other option, they will be able to organise everything for you and give you support and advice every step of the way.

Bankruptcy will change your life, so think very carefully before you make any decisions regarding your financial situation. The best option is to consult a professional debt solutions team with years of experience, such as Fox Symes.  No longer will you have to negotiate with creditors, deal with hostile phone calls and worry about the next letter in the mail.  Professional debt solutions are designed to get you back on track and in control of your finances for good.