It is compulsory in Australia for your employer to make regular payments into your superannuation fund from your salary. Superannuation is designed to pay for your living expenses in retirement. The only time you should access your superannuation before retirement is for serious cases only and it is subject to approval from your superannuation fund.

Superannuation is normally protected from bankruptcy
In most cases superannuation is protected from your creditors whilst you’re bankrupt, unless you purposefully made extra payments into your superannuation fund to avoid paying your creditors. Standard contributions by your employer will be protected whilst you are bankrupt.
Given your superannuation will be protected even if you go bankrupt, there is no reason to use your superannuation funds to pay creditors to avoid bankruptcy. We recommend other options which are discussed below.

Credit Counselling
We recommend that you first seek professional advice from a licenced debt counsellor. The following government website provides extensive information about debt counsellors A licenced debt counsellor will provide impartial advice because they are government funded, meaning they will not be paid for recommending any commercial debt solution. Your debt counsellor may be able to apply for financial hardship with your creditors whilst they advise you on your options. During this period you are not allowed to use your credit cards or incur further debt. Do not engage the services of a commercial debt counsellor as they may not provide impartial advice and instead recommend a commercial debt solution from which they will be paid.

Debt Consolidation
Debt consolidation is the process of paying off multiple debts with a single loan. We recommend that you apply to your local bank or financial institution to see if you are eligible for a debt consolidation loan. You may need a good credit score to apply for a debt consolidation loan. If you are refused a debt consolidation loan then we recommend that you should consider a Debt Agreement, Personal Insolvency Agreement or Bankruptcy.

Debt Agreement or Personal Insolvency Agreement
You may also be eligible for a Debt Agreement or a Personal Insolvency Agreement. Our website provides extensive information on Debt Agreements and Personal Insolvency Agreements

It’s important to research and carefully consider all options before proceeding with any debt solution. We also recommend that you only seek professional advice.

At Debt Free Australia we will provide impartial advice which will suit your circumstances. We have an in house Registered Trustee who can advise you on all aspects of personal debt solutions.

Call our friendly and professional debt advisors today on our 24/7 debt advice hot line on 1800 462 767.