Many people with unmanageable debt feel completely alone with their struggles. They feel that they have somehow failed in being unable to maintain their repayments and that they have no right to ask for help. In actual fact there are countless Australians suffering serious financial difficulty, and a network of support options available to them.
The first option you have when you cannot pay your debts is to approach your banks. This is actually the least common step to be taken by people with financial difficulties, as the pressure and guilt that they can put you under for payment scares most people away. But every financial institution has, or should have, what is usually known as a “hardship” department, an area that you can contact to ask for some relief with your payments when you are seriously struggling. When you call your bank, try not to get stuck with the first person who answers and insists on committing you to payments – ask very clearly and firmly to be connected to their hardship area, and there you will get the information you need to be able to apply for their help.
If you are unable to gain a hardship arrangement with your individual creditors, you might want to try coming to an informal arrangement with the assistance of a third party. Try searching for financial counselors or companies that offer a budgeting service. Many of them will charge a fee, but if your situation is dire enough you may be able to find assistance through a local charity or church.
And if you find that this option is still not sufficient for your needs, you can always consider a formal arrangement to manage your debts. Your formal options can be either a Debt Agreement or Personal Insolvency Agreement, which are legally binding payment arrangements governed by the Bankruptcy Act, or actual Bankruptcy.
For free and impartial advice on where to get help for your particular financial problems, call our 1800 676 598. We can help you to assess the severity of your situation and the options that may be available to you, and either assist you ourselves or direct you to the organization that will best be able to help you.

Some of the consequences of Bankruptcy cannot be known for certain until you actually go ahead with it, because they depend upon the findings of your Bankruptcy Trustee’s investigations. There is one thing that is certain, though, which is that it is going to affect your credit file.
Declaring yourself Bankrupt will place a mark on your credit file for a period of seven years from the day your application is accepted. You will find that whilst you are a Bankrupt person you are not actually allowed to apply for credit over a certain amount without declaring the fact that you are Bankrupt. It is probably easier to assume, though, that you will not be applying for credit at all whilst you are Bankrupt, which is usually for three years.
So when you come out of Bankruptcy there will still be a four year period where you will have a mark on your credit file. You may find, however, that having this default is not as bad as it sounds. For one thing, you will have just spent three years living entirely without credit and instead using your own available funds. You will have learned to budget, and without any creditor repayments to make you may have managed to put some money into savings.
Also, just because you have a default against your name, that does not necessarily mean that you will not be able to get credit. If you are earning a good income and you have some savings behind you, you may find that the default will not stop your application. And if you are applying for a secured loan to purchase an asset, or you have an asset that you are willing to put up as security, you will be considered a lesser credit risk than if the credit was completely unsecured.
The default on your credit file when you declare yourself Bankrupt is designed to give you a fresh start, to stop you from being able to keep adding to your debt and give you time to become financially rehabilitated. And with some planning and saving during your years as a Bankrupt person, you will find that credit will still be available to you in the future – if not during the seven years that you have a default, then after, when the mark is completely wiped from your credit file. If you are considering Bankruptcy and are concerned about the effect it will have on your credit history, call our consultants today on 1800 676 598 for free and impartial advice on gaining credit after Bankruptcy.

The feeling of not being in control of your debt is fraught with negative connotations and misconceptions. Terms like “black-listed”, “insolvent” and “Bankrupt” are often confused and misconstrued, and lead to undue feelings of guilt and shame. For many people find themselves “black-listed” even if they have been paying their debts; you can be insolvent without having to go Bankrupt; and if you are facing Bankruptcy, nine times out of ten, it will not actually be your fault.
To be insolvent is simply to be unable to pay your debts as they fall due. So as you can imagine, becoming insolvent is actually quite easy. You might have an unexpected expense, or suffer a drop in income through illness or some other reason. It can be a temporary thing, something that you can recover from when your situation returns to normal. Some people are actually insolvent without even realising it, as they are paying their debts, but using their other credit facilities to cover those payments. It is when you realise that you are insolvent that you then need to look at your options for resolving the situation.
Bankruptcy is one such option. It is not synonymous with insolvency in the sense that one necessarily means the other. Rather, it is a process that is available to insolvent people to remove the pressure of unmanageable debt whilst also providing the fairest possible outcome for the creditors involved. It is also, for many people, a last resort option.
If you are insolvent, that is, unable to pay your debts as they fall due, but you still have a regular income and can make some payments towards your debts, there are certain steps that you can look at before Bankruptcy. The first would be to apply for hardship with each of your creditors. They will assess you individually and may grant you certain temporary reprieves, such as putting a hold on payments, or freezing your interest for a few months. If this turns out to be insufficient to solve your problems you may have the option of proposing a government regulated repayment plan. This is called, depending on your level of income and/or debt, a Debt Agreement or a Personal Insolvency Agreement. They are both, in essence, the same thing; a formal and legally binding alternative to Bankruptcy that does not carry with it all of the negative consequences that Bankruptcy does.
If you are struggling with debt, a clear understanding of your situation and your available options is the first step toward easing the pressure. Here at Debt Free Australia we are fully qualified and experienced in all aspects of personal insolvency, and can give you the advice you need to make an educated decision about your financial future. Call us on 1800 676 598 for impartial and obligation-free debt advice.