1 00:00:00,200 --> 00:00:19,440 Speaker 1: She's on the Money. She's on the Money. 2 00:00:23,000 --> 00:00:26,040 Speaker 2: Hello, and welcome to She's on the Money, the podcast 3 00:00:26,160 --> 00:00:30,040 Speaker 2: for millennials who want financial freedom. Today we're getting right 4 00:00:30,080 --> 00:00:33,480 Speaker 2: into the nitty gritty of bankruptcy. What is it, who 5 00:00:33,520 --> 00:00:36,519 Speaker 2: is it the right option for, and what potential consequences 6 00:00:36,560 --> 00:00:39,800 Speaker 2: can it have on our future. My name is Jessica Ricky, 7 00:00:40,000 --> 00:00:44,880 Speaker 2: and today I'm joined by the light of my life. 8 00:00:43,800 --> 00:00:44,560 Speaker 3: Of your life. 9 00:00:45,080 --> 00:00:50,000 Speaker 2: Yeah, sorry, James, I was about to say that's dramatic. 10 00:00:50,080 --> 00:00:50,839 Speaker 3: I'll take it though. 11 00:00:50,840 --> 00:00:53,199 Speaker 4: I'm not going to ask any further questions, so just 12 00:00:53,240 --> 00:00:54,640 Speaker 4: move on, keep talking. 13 00:00:54,440 --> 00:00:56,000 Speaker 3: Just so that we don't take it back. 14 00:00:56,240 --> 00:00:57,960 Speaker 2: Well, today, when we were doing a little bit of 15 00:00:58,000 --> 00:01:01,440 Speaker 2: research for the show, I realized that I didn't even 16 00:01:01,520 --> 00:01:05,080 Speaker 2: know that an individual person can file for bankruptcy. I 17 00:01:05,080 --> 00:01:07,920 Speaker 2: thought it was a business thing. So to kick it off, 18 00:01:07,959 --> 00:01:10,880 Speaker 2: can you kind of just explain to me exactly what 19 00:01:10,959 --> 00:01:12,399 Speaker 2: bankruptcy actually means. 20 00:01:12,720 --> 00:01:16,920 Speaker 4: So, yes, businesses, but also people can file for bankruptcy, 21 00:01:17,000 --> 00:01:17,600 Speaker 4: and it's. 22 00:01:17,440 --> 00:01:19,880 Speaker 3: Something that we'll get into the nitty gritty. 23 00:01:19,560 --> 00:01:21,800 Speaker 4: Of it, as you said before, but it's something that 24 00:01:21,840 --> 00:01:25,280 Speaker 4: I think has a really unnecessary stigma associated with it 25 00:01:25,520 --> 00:01:28,240 Speaker 4: because for those people who it is the right option 26 00:01:28,360 --> 00:01:31,320 Speaker 4: for it can be really liberating, it can be really freeing, 27 00:01:31,640 --> 00:01:33,800 Speaker 4: and it can be actually something that gives them a 28 00:01:33,800 --> 00:01:37,199 Speaker 4: brand new clean slate to start off. But to jump 29 00:01:37,200 --> 00:01:41,160 Speaker 4: to the official description of bankruptcy, bankruptcy is a legal 30 00:01:41,240 --> 00:01:44,880 Speaker 4: process and it is available to individuals or entities like businesses, 31 00:01:45,000 --> 00:01:48,040 Speaker 4: who are unable to pay their debts. So bankruptcy releases 32 00:01:48,080 --> 00:01:51,279 Speaker 4: you from most of your debts, which, as I said before, 33 00:01:51,400 --> 00:01:54,320 Speaker 4: for most people comes as a huge relief and gives 34 00:01:54,320 --> 00:01:57,160 Speaker 4: them a fresh start. So there are a number of 35 00:01:57,200 --> 00:01:58,840 Speaker 4: ways to do this. In fact, when I say a 36 00:01:58,920 --> 00:02:01,600 Speaker 4: number of ways, I mean two. You can either do 37 00:02:01,680 --> 00:02:05,480 Speaker 4: it voluntarily or someone that you owe money to can 38 00:02:05,520 --> 00:02:08,320 Speaker 4: actually force it on you via the courts, which is 39 00:02:08,400 --> 00:02:12,160 Speaker 4: called a sequestration order. If that's not enough of a mouthful, 40 00:02:12,320 --> 00:02:13,760 Speaker 4: just ca that's stricky. 41 00:02:13,800 --> 00:02:15,200 Speaker 3: It's sequestration. 42 00:02:15,480 --> 00:02:18,520 Speaker 4: Say it with me, guys, but that's what it's called. 43 00:02:18,639 --> 00:02:22,200 Speaker 4: And usually bankruptcy lasts for three years and one day, 44 00:02:22,560 --> 00:02:25,240 Speaker 4: although in some instances it can actually be extended for 45 00:02:25,320 --> 00:02:27,600 Speaker 4: up to eight years. And it means a lot of 46 00:02:27,639 --> 00:02:29,639 Speaker 4: different things to a lot of different people. So we're 47 00:02:29,639 --> 00:02:30,840 Speaker 4: gonna unpack that today. 48 00:02:31,480 --> 00:02:35,280 Speaker 2: So when you go bankrupt what actually happens to the debt. 49 00:02:35,320 --> 00:02:37,799 Speaker 2: I'm assuming it doesn't just like poof into thin air. 50 00:02:38,240 --> 00:02:41,160 Speaker 4: Kinder, it does, but it doesn't. It's one of those 51 00:02:41,200 --> 00:02:43,840 Speaker 4: things where there are a lot of caveats, but you 52 00:02:43,919 --> 00:02:46,400 Speaker 4: typically don't need to pay your debts back other than 53 00:02:46,440 --> 00:02:49,640 Speaker 4: any secure debts, which we will go through shortly. But 54 00:02:49,760 --> 00:02:52,240 Speaker 4: typically the debts don't end up being paid in full, 55 00:02:52,320 --> 00:02:55,400 Speaker 4: although through your trustee, you can pay off as much 56 00:02:55,440 --> 00:02:58,919 Speaker 4: of the debt as humanly possible by selling your assets. 57 00:02:58,960 --> 00:03:01,120 Speaker 4: So they might actually force you to do this and 58 00:03:01,240 --> 00:03:04,360 Speaker 4: sell assets, and that's why it's really important to know 59 00:03:04,400 --> 00:03:08,880 Speaker 4: the difference between voluntary and forced bankruptcy. But they can 60 00:03:09,000 --> 00:03:11,079 Speaker 4: essentially force you to sell your assets, or you can 61 00:03:11,120 --> 00:03:13,040 Speaker 4: sell your assets to pay off some of the debt, 62 00:03:13,440 --> 00:03:15,840 Speaker 4: or in certain situations where you earn over a certain 63 00:03:15,840 --> 00:03:18,679 Speaker 4: amount of money, there are compulsory payments that come into 64 00:03:18,680 --> 00:03:21,680 Speaker 4: play that you might need to meet. So it's important 65 00:03:21,680 --> 00:03:24,560 Speaker 4: to understand that and what it actually means. 66 00:03:25,080 --> 00:03:28,400 Speaker 2: Can anybody go bankrupt or is there certain criteria that 67 00:03:28,440 --> 00:03:29,400 Speaker 2: you need to meet? 68 00:03:29,639 --> 00:03:32,000 Speaker 4: Look, there's criteria you need to meet, and I'm going 69 00:03:32,080 --> 00:03:34,720 Speaker 4: to give you a legal criteria now, but I think 70 00:03:34,760 --> 00:03:37,200 Speaker 4: that there are so many other things that we need 71 00:03:37,240 --> 00:03:40,360 Speaker 4: to take into consideration because there are some serious consequences 72 00:03:40,400 --> 00:03:43,880 Speaker 4: of going bankrupt. But essentially, to file for bankruptcy here 73 00:03:43,880 --> 00:03:46,480 Speaker 4: in Australia you need to meet too requirements. You need 74 00:03:46,520 --> 00:03:48,200 Speaker 4: to not be able to pay your debts when they 75 00:03:48,240 --> 00:03:50,440 Speaker 4: are due, and you need to be in Australia and 76 00:03:50,520 --> 00:03:54,240 Speaker 4: have a business or residential connection to Australia. So that 77 00:03:54,360 --> 00:03:57,600 Speaker 4: seems pretty broad, but it's something that we really do 78 00:03:57,760 --> 00:04:00,840 Speaker 4: need to understand the consequences of the decisions that we 79 00:04:00,880 --> 00:04:01,400 Speaker 4: are making. 80 00:04:02,080 --> 00:04:04,640 Speaker 2: So with that in mind, is it a good idea 81 00:04:04,680 --> 00:04:06,960 Speaker 2: in your opinion to file for bankruptcy? 82 00:04:07,240 --> 00:04:07,720 Speaker 3: Yes and no. 83 00:04:08,000 --> 00:04:10,360 Speaker 4: So yes it can be if it's the right thing 84 00:04:10,440 --> 00:04:12,480 Speaker 4: for you, and we'll go through this in a minute. 85 00:04:12,520 --> 00:04:15,160 Speaker 4: But also no, it can be a bad decision if 86 00:04:15,200 --> 00:04:16,800 Speaker 4: it is not the right decision for you. 87 00:04:16,960 --> 00:04:17,760 Speaker 3: So it's one of. 88 00:04:17,720 --> 00:04:22,480 Speaker 4: Those things that you really need to consider. But there's 89 00:04:22,520 --> 00:04:26,480 Speaker 4: a lesser of two evils. So going through bankruptcy voluntarily 90 00:04:26,680 --> 00:04:29,560 Speaker 4: is obviously a lot softer you are in control and 91 00:04:29,640 --> 00:04:32,599 Speaker 4: you understand it. Yes, you will, you know, still have 92 00:04:32,640 --> 00:04:36,080 Speaker 4: to adhere to the process, but being forced into it 93 00:04:36,160 --> 00:04:38,280 Speaker 4: leaves you a lot less choice, and I think that 94 00:04:38,440 --> 00:04:42,760 Speaker 4: sometimes people end up being forced into bankruptcy because they've 95 00:04:42,800 --> 00:04:45,840 Speaker 4: said no to voluntary bankruptcy so many times because. 96 00:04:45,600 --> 00:04:47,120 Speaker 3: They're like, no, I don't want to do that. I 97 00:04:47,120 --> 00:04:48,160 Speaker 3: don't want to go bankrupt. 98 00:04:48,240 --> 00:04:51,560 Speaker 4: I don't want the negative consequences. But they haven't thought 99 00:04:51,640 --> 00:04:54,080 Speaker 4: far enough in advance to go, okay, cool. If I 100 00:04:54,120 --> 00:04:56,880 Speaker 4: don't choose this and actually deal with the process and 101 00:04:57,160 --> 00:04:59,200 Speaker 4: choose the assets that I want to sell to pay 102 00:04:59,240 --> 00:05:01,359 Speaker 4: back my debts, I'm actually going to end up in 103 00:05:01,360 --> 00:05:04,159 Speaker 4: a situation where somebody else is making that decision for 104 00:05:04,279 --> 00:05:07,360 Speaker 4: me and I have absolutely no control. So this is 105 00:05:07,400 --> 00:05:11,320 Speaker 4: all about education and understanding when this might be right 106 00:05:11,360 --> 00:05:14,240 Speaker 4: for you, but also what the process means and how 107 00:05:14,240 --> 00:05:16,720 Speaker 4: to support people that you know are going through this. 108 00:05:16,720 --> 00:05:20,680 Speaker 2: Process, because Jess, it is stressful, it sounds quite scary. 109 00:05:20,720 --> 00:05:23,919 Speaker 2: I'm not going to lie to you. And as you said, obviously, 110 00:05:24,080 --> 00:05:26,840 Speaker 2: I think with that big stigma, we really hope that 111 00:05:26,880 --> 00:05:29,520 Speaker 2: this episode can make some people feel a little bit 112 00:05:29,560 --> 00:05:31,760 Speaker 2: more comfortable with the concept. And if it is something 113 00:05:31,760 --> 00:05:34,000 Speaker 2: you have to do, you know for you always say 114 00:05:34,040 --> 00:05:37,760 Speaker 2: that your financial situation isn't a negative reflection of you. 115 00:05:37,760 --> 00:05:39,559 Speaker 2: You were doing the best you could with the tools 116 00:05:39,600 --> 00:05:40,479 Speaker 2: that you had at the time. 117 00:05:41,040 --> 00:05:42,080 Speaker 4: Maybe you could become me. 118 00:05:42,560 --> 00:05:45,880 Speaker 2: I literally am i adopel ganger who knows. But you know, 119 00:05:46,000 --> 00:05:48,720 Speaker 2: bankruptcy might just be a tool or a resource that 120 00:05:48,760 --> 00:05:51,160 Speaker 2: you need to utilize currently. But we do need to 121 00:05:51,200 --> 00:05:54,360 Speaker 2: consider those negative consequences. Can you kind of run us 122 00:05:54,360 --> 00:05:56,520 Speaker 2: through what those may or may not look like. 123 00:05:56,839 --> 00:05:59,880 Speaker 4: Yes, so obviously, if you are in a significant amount 124 00:05:59,920 --> 00:06:03,320 Speaker 4: of debt to clearing bankruptcy could be a massive relief. 125 00:06:03,760 --> 00:06:05,880 Speaker 4: But there are some things that we need to consider, 126 00:06:05,920 --> 00:06:07,200 Speaker 4: and I'm going to list them off. I have a 127 00:06:07,200 --> 00:06:09,560 Speaker 4: total of seven dot points that I have written down 128 00:06:09,760 --> 00:06:11,640 Speaker 4: that we are going to go through together. So the 129 00:06:11,680 --> 00:06:13,880 Speaker 4: first one is that it can impact your ability to 130 00:06:13,920 --> 00:06:14,960 Speaker 4: access credit. 131 00:06:14,720 --> 00:06:15,320 Speaker 3: In the future. 132 00:06:15,600 --> 00:06:17,920 Speaker 4: And while short term you might go, I don't want credit, 133 00:06:18,000 --> 00:06:21,040 Speaker 4: like that's fine, just take that away from me. If 134 00:06:21,040 --> 00:06:23,560 Speaker 4: you do apply for credit over a set amount, then 135 00:06:23,600 --> 00:06:26,320 Speaker 4: you'll be legally obligated to let the credit provider know 136 00:06:26,440 --> 00:06:29,240 Speaker 4: that you were bankrupt in the past, and then they 137 00:06:29,320 --> 00:06:31,960 Speaker 4: might decide not to lend to you. So this is 138 00:06:32,040 --> 00:06:35,680 Speaker 4: not just about getting another credit card. It could actually 139 00:06:35,720 --> 00:06:38,880 Speaker 4: impact your ability to get a home loan in the future. 140 00:06:39,000 --> 00:06:41,800 Speaker 4: And as we said before, Yes, it's usually for three 141 00:06:41,880 --> 00:06:43,760 Speaker 4: years and one day, but it could be up to 142 00:06:43,880 --> 00:06:46,200 Speaker 4: eight years, and you don't know what you want to 143 00:06:46,200 --> 00:06:49,320 Speaker 4: do in the next eight years, and from my perspective, 144 00:06:49,440 --> 00:06:52,359 Speaker 4: I don't want that decision taken away from me. But 145 00:06:52,680 --> 00:06:55,920 Speaker 4: credit reporting agencies do keep a record of your bankruptcy 146 00:06:55,920 --> 00:06:58,479 Speaker 4: for either two years from when it ends or five 147 00:06:58,560 --> 00:07:02,559 Speaker 4: years from the starting date of the bankruptcy, whichever is later. 148 00:07:03,080 --> 00:07:05,279 Speaker 3: Just to be a little bit technical. 149 00:07:04,920 --> 00:07:07,159 Speaker 2: There, So that'll be around for a little while. 150 00:07:07,279 --> 00:07:09,840 Speaker 4: It will stick around for a little while. But then 151 00:07:09,960 --> 00:07:12,520 Speaker 4: number two on my list of dot points is a 152 00:07:12,640 --> 00:07:15,800 Speaker 4: trustee will come on board to manage your bankruptcy. So 153 00:07:16,040 --> 00:07:19,160 Speaker 4: don't that sounds complicated. What is a trustee. It's essentially 154 00:07:19,200 --> 00:07:23,240 Speaker 4: somebody who's been appointed to look after you and this process, 155 00:07:23,600 --> 00:07:25,920 Speaker 4: and they're going to work with you and your creditors 156 00:07:25,960 --> 00:07:28,680 Speaker 4: to make sure that absolutely everybody is happy and working 157 00:07:28,720 --> 00:07:32,000 Speaker 4: towards an outcome that suits every single party. During the 158 00:07:32,040 --> 00:07:35,360 Speaker 4: three years that you are in bankruptcy, you'll actually need 159 00:07:35,400 --> 00:07:37,520 Speaker 4: to keep the trustee in the loop with lots of 160 00:07:37,560 --> 00:07:40,440 Speaker 4: things like specific life changes, and you'll need to provide 161 00:07:40,440 --> 00:07:43,400 Speaker 4: them with certain documents when required, So they kind of 162 00:07:43,440 --> 00:07:47,680 Speaker 4: become not the boss, but kind of the responsible entity 163 00:07:47,880 --> 00:07:51,880 Speaker 4: for this situation, and they need to actually make decisions 164 00:07:51,920 --> 00:07:53,800 Speaker 4: on your behalf. And as much as they are the 165 00:07:53,800 --> 00:07:56,080 Speaker 4: ones that are there to make sure everybody is happy, 166 00:07:56,120 --> 00:07:58,680 Speaker 4: it doesn't necessarily mean that you're going to get everything 167 00:07:58,720 --> 00:08:01,440 Speaker 4: that you want out of this recess. Their job is 168 00:08:01,560 --> 00:08:04,400 Speaker 4: essentially to make sure it is the best path forward, 169 00:08:04,440 --> 00:08:07,680 Speaker 4: and sometimes that's not exactly what you want, but it 170 00:08:07,720 --> 00:08:11,600 Speaker 4: is definitely for the better. To point number three, Jess, 171 00:08:11,960 --> 00:08:15,560 Speaker 4: is bankruptcy can actually impact your employment, your income, and 172 00:08:15,600 --> 00:08:18,440 Speaker 4: your business if you have one. So if you've declared 173 00:08:18,480 --> 00:08:21,320 Speaker 4: bankruptcy and things are going well but you're earning over 174 00:08:21,400 --> 00:08:24,240 Speaker 4: a set amount of money, then you might actually need 175 00:08:24,320 --> 00:08:27,239 Speaker 4: to make additional payments to your trustee during that period 176 00:08:27,240 --> 00:08:29,560 Speaker 4: of time because they're like, yeah, cool, Jess, Like you 177 00:08:29,680 --> 00:08:33,200 Speaker 4: declared bankruptcy and you definitely couldn't afford it, we get it, 178 00:08:33,320 --> 00:08:35,800 Speaker 4: but now you can, so you probably should do the 179 00:08:35,880 --> 00:08:38,480 Speaker 4: right thing. And look, I agree with it, but I 180 00:08:38,480 --> 00:08:41,200 Speaker 4: think it's really important to understand that it's not just 181 00:08:41,240 --> 00:08:43,840 Speaker 4: a get out of jail free card and you're wiping 182 00:08:43,840 --> 00:08:45,840 Speaker 4: the slate clean and then you can go make millions 183 00:08:45,880 --> 00:08:49,520 Speaker 4: of dollars in a different business because you've been extinguished. 184 00:08:48,880 --> 00:08:50,240 Speaker 3: Of all the debts that you had. 185 00:08:50,600 --> 00:08:52,840 Speaker 4: That's absolutely not the case, and I think that so 186 00:08:53,000 --> 00:08:56,200 Speaker 4: many people think that that's an option when it is not. 187 00:08:56,440 --> 00:08:59,040 Speaker 3: My friends, random question. 188 00:08:59,120 --> 00:09:02,880 Speaker 2: Now, we mentioned earlier that it can impact your ability 189 00:09:02,960 --> 00:09:06,320 Speaker 2: to get alone. If you're a business owner, can you 190 00:09:06,400 --> 00:09:09,240 Speaker 2: be required to sell business assets as well as your 191 00:09:09,240 --> 00:09:09,839 Speaker 2: personal act? 192 00:09:09,920 --> 00:09:13,079 Speaker 4: Absolutely, everything is fair game. It just depends how you've 193 00:09:13,120 --> 00:09:15,120 Speaker 4: been structured. But it is a really big deal. 194 00:09:15,400 --> 00:09:16,319 Speaker 2: Yeah, okay, all right. 195 00:09:16,360 --> 00:09:19,440 Speaker 4: Dot point number four is not that it's a massive deal, 196 00:09:19,480 --> 00:09:23,280 Speaker 4: but bankruptcy can actually impact your ability to travel overseas. 197 00:09:23,320 --> 00:09:25,600 Speaker 4: And I mean, right now, that is not something that. 198 00:09:25,679 --> 00:09:27,320 Speaker 3: Any of us even have the option of. 199 00:09:27,400 --> 00:09:29,560 Speaker 2: It's like, we're all bank bankrupt right now. 200 00:09:30,160 --> 00:09:32,920 Speaker 4: But in normal times, you would need to request permission 201 00:09:32,920 --> 00:09:36,439 Speaker 4: from your trustee before you actually travel overseas. And it's 202 00:09:36,440 --> 00:09:38,720 Speaker 4: actually an offense to travel without written permission. 203 00:09:38,880 --> 00:09:39,960 Speaker 3: Who would have thought. 204 00:09:39,760 --> 00:09:41,920 Speaker 4: It's like getting a signed slipped from your mum to 205 00:09:41,960 --> 00:09:43,080 Speaker 4: go on the school camp. 206 00:09:43,320 --> 00:09:43,640 Speaker 3: All right? 207 00:09:43,720 --> 00:09:47,640 Speaker 4: Number five, number five, our dot point is your assets 208 00:09:47,679 --> 00:09:50,360 Speaker 4: may be sold by your trustee, including your property. So 209 00:09:50,480 --> 00:09:54,160 Speaker 4: this is where we talk about voluntary versus in voluntary bankruptcy. 210 00:09:54,320 --> 00:09:57,800 Speaker 4: Like sometimes if you go voluntarily bankrupt you can have 211 00:09:57,960 --> 00:10:00,360 Speaker 4: more of a say in this process. But at the 212 00:10:00,480 --> 00:10:02,480 Speaker 4: end of the day, you need to pay those debts back. 213 00:10:02,559 --> 00:10:04,200 Speaker 4: So it doesn't mean you get to keep your house 214 00:10:04,240 --> 00:10:07,120 Speaker 4: and extinguish your personal debts. If you have an asset 215 00:10:07,280 --> 00:10:10,640 Speaker 4: that could potentially pay the debt that you've incurred off, 216 00:10:10,960 --> 00:10:13,480 Speaker 4: they're absolutely going to want to leverage that and make 217 00:10:13,520 --> 00:10:16,400 Speaker 4: sure that you get back to ground zero. It doesn't 218 00:10:16,440 --> 00:10:19,600 Speaker 4: mean you personally staying in that position. No matter how 219 00:10:19,640 --> 00:10:22,160 Speaker 4: long you saved for that house. They're going to go. Okay, 220 00:10:22,160 --> 00:10:24,800 Speaker 4: but I know, Jess that you have this massive mortgage 221 00:10:24,800 --> 00:10:26,920 Speaker 4: and you know you've got this beautiful home, But at 222 00:10:26,920 --> 00:10:28,760 Speaker 4: the end of the day, your personal debts are way 223 00:10:28,800 --> 00:10:31,480 Speaker 4: out weigh what that is, and if we sold your property, 224 00:10:31,520 --> 00:10:33,360 Speaker 4: we could extinguish some of those debts. 225 00:10:33,600 --> 00:10:35,000 Speaker 3: That's what they're going to do. 226 00:10:35,360 --> 00:10:37,559 Speaker 4: So it's not as though it's a get out of 227 00:10:37,600 --> 00:10:39,319 Speaker 4: jail free card and you get to keep your home. 228 00:10:39,480 --> 00:10:43,640 Speaker 4: It's a really dramatic process. My tot point number six 229 00:10:43,760 --> 00:10:46,920 Speaker 4: is bankruptcy does not mean all of your debts are gone. 230 00:10:47,280 --> 00:10:50,800 Speaker 4: So while most unsecured debts are sorted out by the bankruptcy. 231 00:10:50,880 --> 00:10:53,840 Speaker 4: So we're talking credit cards and your gas bill for example, 232 00:10:54,040 --> 00:10:56,240 Speaker 4: they are going to be covered by the bankruptcy. But 233 00:10:56,320 --> 00:10:58,560 Speaker 4: any secure debts that you have, like a car that 234 00:10:58,640 --> 00:11:00,719 Speaker 4: might still be under finance that you still want to 235 00:11:00,760 --> 00:11:03,079 Speaker 4: hold on to, they still need to be repaid. You 236 00:11:03,120 --> 00:11:06,559 Speaker 4: don't just get a car for free because you declared bankruptcy, 237 00:11:06,960 --> 00:11:09,760 Speaker 4: and then if you can't pay back that secured debt, 238 00:11:10,120 --> 00:11:12,480 Speaker 4: then you'll need to hand that item back to the creditor. 239 00:11:12,600 --> 00:11:15,760 Speaker 4: You just again can't keep the car. There's no good 240 00:11:15,840 --> 00:11:19,120 Speaker 4: outcome here. I've spoken to too many people historically that 241 00:11:19,160 --> 00:11:20,760 Speaker 4: are of the opinion they're like, oh, well, if I 242 00:11:20,800 --> 00:11:23,640 Speaker 4: declare bankruptcy, they'll get rid of my car Loan Like 243 00:11:23,760 --> 00:11:26,079 Speaker 4: yeh cool, but like the car's going to my friends, 244 00:11:26,240 --> 00:11:28,760 Speaker 4: Like you don't get the best of both worlds. It 245 00:11:28,920 --> 00:11:31,800 Speaker 4: is definitely a compromise. But at the end of the day, 246 00:11:31,840 --> 00:11:35,040 Speaker 4: as we're saying before, for some people, just an absolutely 247 00:11:35,120 --> 00:11:38,800 Speaker 4: clean slate is exactly what they need because they're too 248 00:11:38,840 --> 00:11:40,960 Speaker 4: far up that river, if that makes sense. 249 00:11:41,679 --> 00:11:42,000 Speaker 2: Yeah. 250 00:11:42,040 --> 00:11:44,959 Speaker 4: And then number seven, which I think is really important 251 00:11:45,000 --> 00:11:48,440 Speaker 4: because impacts your ability to run businesses in Australia and 252 00:11:48,800 --> 00:11:52,280 Speaker 4: it's actually public record is that you will permanently be 253 00:11:52,400 --> 00:11:56,000 Speaker 4: added to the National Personal Insolvency Index, which is a 254 00:11:56,040 --> 00:12:01,360 Speaker 4: public register listing all insolvency proceeds in Australia and anyone. 255 00:12:00,920 --> 00:12:01,800 Speaker 3: Can access that. 256 00:12:02,200 --> 00:12:04,600 Speaker 4: So it's not a bad thing. As I said before, 257 00:12:04,640 --> 00:12:06,680 Speaker 4: I don't think we should be ashamed of these things. 258 00:12:06,720 --> 00:12:08,840 Speaker 4: I don't think that we should, you know, have such 259 00:12:08,880 --> 00:12:12,079 Speaker 4: negative connotations associated with them. But at the end of 260 00:12:12,120 --> 00:12:14,760 Speaker 4: the day, for some people it is really important that 261 00:12:14,840 --> 00:12:17,439 Speaker 4: they know that because I know a few times I've 262 00:12:17,440 --> 00:12:20,520 Speaker 4: spoken to people that were horrified that people could access 263 00:12:20,559 --> 00:12:23,280 Speaker 4: that information and they just didn't. 264 00:12:23,000 --> 00:12:25,200 Speaker 3: Know that that was a part of the process. But yes, 265 00:12:25,240 --> 00:12:27,840 Speaker 3: it will be public knowledge. Wow. 266 00:12:27,840 --> 00:12:30,840 Speaker 2: So there's definitely a lot to take into consideration when 267 00:12:30,880 --> 00:12:33,440 Speaker 2: deciding if bankruptcy is maybe the route to go down. 268 00:12:33,480 --> 00:12:35,360 Speaker 2: And we'll be back after a really short break to 269 00:12:35,440 --> 00:12:37,959 Speaker 2: discuss the shame that can be tied to it sometimes 270 00:12:38,040 --> 00:12:40,680 Speaker 2: whether that is warranted or not, and some other options 271 00:12:40,720 --> 00:12:42,560 Speaker 2: for dealing with our debt if it does feel like 272 00:12:42,600 --> 00:12:50,760 Speaker 2: we're spiraling out of control already. B We said before 273 00:12:50,800 --> 00:12:52,760 Speaker 2: that there is a bit of a sense of shame 274 00:12:53,000 --> 00:12:56,080 Speaker 2: tied to filing for bankruptcy. I've seen some discussions in 275 00:12:56,120 --> 00:12:59,640 Speaker 2: the group previously, and someone named Carla mentioned that she 276 00:12:59,720 --> 00:13:03,160 Speaker 2: was stubborn to file for bankruptcy and permitted to paying 277 00:13:03,160 --> 00:13:06,680 Speaker 2: off her debts, which more power to you. But she 278 00:13:06,720 --> 00:13:08,960 Speaker 2: says that she regrets that decision and found it to 279 00:13:08,960 --> 00:13:12,920 Speaker 2: be a really traumatic time for her. What are attitudes 280 00:13:13,040 --> 00:13:15,720 Speaker 2: like when it comes to bankruptcy? And I mean, they 281 00:13:15,720 --> 00:13:17,560 Speaker 2: may not be right or a wrong, but can we 282 00:13:17,559 --> 00:13:18,560 Speaker 2: do anything about it? 283 00:13:19,240 --> 00:13:19,480 Speaker 3: Yes? 284 00:13:19,559 --> 00:13:23,480 Speaker 4: And no. I totally sympathize with Carla because sometimes you 285 00:13:23,640 --> 00:13:26,520 Speaker 4: definitely have your head in the sand about debt and 286 00:13:26,559 --> 00:13:29,000 Speaker 4: you don't want to get yourself out of it. I've 287 00:13:29,040 --> 00:13:32,000 Speaker 4: been in situations where I've sat down with people and 288 00:13:32,080 --> 00:13:36,280 Speaker 4: have done full financial advice in this situation historically, where 289 00:13:36,280 --> 00:13:38,760 Speaker 4: I've sat down with someone who was actually in close 290 00:13:38,800 --> 00:13:41,920 Speaker 4: to two hundred thousand dollars worth of personal debt. Wow, 291 00:13:41,960 --> 00:13:45,160 Speaker 4: we're not talking mortgages, We're not talking cars like literal 292 00:13:45,240 --> 00:13:48,640 Speaker 4: credit cards and personal loans that they then had nothing 293 00:13:48,720 --> 00:13:51,760 Speaker 4: to show for it. And I did all the calculations 294 00:13:51,800 --> 00:13:54,320 Speaker 4: and worked out that for them to pay back the 295 00:13:54,400 --> 00:13:57,040 Speaker 4: debt that they had at the income that they had 296 00:13:57,120 --> 00:13:59,320 Speaker 4: and you know, there are obviously a lot more factors, 297 00:13:59,320 --> 00:14:01,600 Speaker 4: but I'm not going to go into their personal situation 298 00:14:01,880 --> 00:14:05,400 Speaker 4: too deeply because that would not be appropriate. But essentially 299 00:14:05,559 --> 00:14:08,120 Speaker 4: I calculated it out, and if she'd actually stayed and 300 00:14:08,160 --> 00:14:11,120 Speaker 4: tried to pay out the debt, it would have taken 301 00:14:11,160 --> 00:14:14,600 Speaker 4: her one hundred years to pay that debt off. At 302 00:14:14,679 --> 00:14:17,600 Speaker 4: the credit ratings there were obviously people will turn around 303 00:14:17,600 --> 00:14:20,520 Speaker 4: and say, okay, well, you probably should be consolidating that debt, 304 00:14:20,560 --> 00:14:24,360 Speaker 4: like we talked about on another podcast recently. But the 305 00:14:24,520 --> 00:14:27,600 Speaker 4: thing with that is because she was so far down 306 00:14:27,680 --> 00:14:31,240 Speaker 4: that river, nobody would consolidate that debt. So no bank 307 00:14:31,360 --> 00:14:34,360 Speaker 4: was willing to refinance, no bank was actually willing to 308 00:14:34,360 --> 00:14:37,560 Speaker 4: give her another credit card or another credit option, and 309 00:14:37,760 --> 00:14:42,240 Speaker 4: it was just a very sticky situation. But in that situation, 310 00:14:42,560 --> 00:14:45,160 Speaker 4: she didn't want to file for bankruptcy because she was 311 00:14:45,440 --> 00:14:47,880 Speaker 4: just so stuck to the idea that there was so 312 00:14:48,040 --> 00:14:50,760 Speaker 4: much shame associated with it and it was such a 313 00:14:50,800 --> 00:14:55,080 Speaker 4: bad thing. But essentially, Jess, we said before, the bankruptcy 314 00:14:55,120 --> 00:14:57,920 Speaker 4: sticks around for three years and one day or eight years, 315 00:14:58,040 --> 00:14:59,600 Speaker 4: it depends on the situation. 316 00:15:00,160 --> 00:15:01,720 Speaker 3: But one hundred years of. 317 00:15:01,720 --> 00:15:03,680 Speaker 4: Paying off debt, she would have had that for the 318 00:15:03,720 --> 00:15:07,360 Speaker 4: rest of her life or eight years of being under 319 00:15:07,400 --> 00:15:11,080 Speaker 4: these rules and regulations, but being financially free from the 320 00:15:11,160 --> 00:15:13,760 Speaker 4: debt that was weighing her down. To me, I could 321 00:15:13,760 --> 00:15:17,560 Speaker 4: fully comprehend that the bankruptcy option was the better option 322 00:15:17,680 --> 00:15:19,840 Speaker 4: for her, and I think that that's what Karla from 323 00:15:19,840 --> 00:15:22,800 Speaker 4: our community has been talking about. She stuck to it, 324 00:15:22,840 --> 00:15:24,320 Speaker 4: and she was like, no, I'm going to pay off 325 00:15:24,320 --> 00:15:27,360 Speaker 4: the debts myself. But what if those debts are so 326 00:15:27,600 --> 00:15:30,920 Speaker 4: overwhelming that it's going to take you thirty years plus 327 00:15:30,960 --> 00:15:33,840 Speaker 4: to get over them, plus the mental anguish and the 328 00:15:33,920 --> 00:15:38,200 Speaker 4: compromise and the lifestyle changes that would be associated, maybe 329 00:15:38,240 --> 00:15:41,440 Speaker 4: it's actually better to go down the bankruptcy process, wipe 330 00:15:41,480 --> 00:15:44,600 Speaker 4: your slight clean, and then be able to start building 331 00:15:44,600 --> 00:15:48,120 Speaker 4: your wealth back up and being financially responsible from there. 332 00:15:48,480 --> 00:15:50,960 Speaker 4: So yes, Jess, there is a sense of shame tied 333 00:15:51,000 --> 00:15:54,000 Speaker 4: to filing for bankruptcy, but I don't think it should 334 00:15:54,040 --> 00:15:56,440 Speaker 4: be there, especially if you've done your research and you 335 00:15:56,600 --> 00:15:59,520 Speaker 4: understand it. And I mean, I'm never going to judge 336 00:15:59,520 --> 00:16:01,840 Speaker 4: a friend. They turned around and said, hey, V Like, 337 00:16:01,920 --> 00:16:05,280 Speaker 4: I've just been in such a sticky situation. I've wracked 338 00:16:05,360 --> 00:16:07,840 Speaker 4: up all this debt and now I'm going to file 339 00:16:07,880 --> 00:16:11,080 Speaker 4: for bankruptcy. I think the most important thing is actually 340 00:16:11,120 --> 00:16:14,640 Speaker 4: really understanding that you are making a change. So if 341 00:16:14,640 --> 00:16:17,560 Speaker 4: you are going to be filing for bankruptcy, see it 342 00:16:17,600 --> 00:16:20,240 Speaker 4: as the clean slate, that it is not some kind 343 00:16:20,320 --> 00:16:22,880 Speaker 4: of punishment for getting in the debt, but rather a 344 00:16:22,880 --> 00:16:25,360 Speaker 4: second chance. And I think that that's a really beautiful 345 00:16:25,360 --> 00:16:27,720 Speaker 4: thing to be afforded in a world where we are 346 00:16:27,760 --> 00:16:31,120 Speaker 4: now able to educate ourselves on financial literacy to make 347 00:16:31,160 --> 00:16:34,040 Speaker 4: sure that we never get into that sticky situation again. 348 00:16:34,800 --> 00:16:37,640 Speaker 2: And if you are worried, I guess about the reaction 349 00:16:37,760 --> 00:16:40,360 Speaker 2: of people around you, I would say that you would 350 00:16:40,440 --> 00:16:42,560 Speaker 2: hope that if you have people who love and care 351 00:16:42,600 --> 00:16:44,600 Speaker 2: about you, they just want what's best for you. And 352 00:16:44,640 --> 00:16:47,640 Speaker 2: if you're able to explain to them, you know, sharing 353 00:16:47,680 --> 00:16:50,200 Speaker 2: as much or as little that you're comfortable sharing, that 354 00:16:50,280 --> 00:16:52,520 Speaker 2: this is a choice that you're making and that you've 355 00:16:52,520 --> 00:16:54,120 Speaker 2: thought it through and that it's going to put you 356 00:16:54,560 --> 00:16:57,600 Speaker 2: in the best possible position, you would hope that those 357 00:16:57,640 --> 00:17:00,440 Speaker 2: people will love and support you. And if they that's 358 00:17:00,480 --> 00:17:02,440 Speaker 2: what our community is for. We're here to tell you 359 00:17:02,440 --> 00:17:04,320 Speaker 2: that there shouldn't be any shame and I'm sure that 360 00:17:04,359 --> 00:17:06,320 Speaker 2: there are people in our community who have gone through 361 00:17:06,320 --> 00:17:08,760 Speaker 2: the exact same thing who are willing to back you 362 00:17:08,840 --> 00:17:10,679 Speaker 2: up and let you know that that's totally okay. 363 00:17:10,960 --> 00:17:13,680 Speaker 4: Absolutely, And I think that it actually goes a little 364 00:17:13,680 --> 00:17:16,720 Speaker 4: bit deeper than that, Jess. If you're surrounded by people 365 00:17:16,720 --> 00:17:20,439 Speaker 4: who aren't supporting you, why are you surrounded by them? Like, 366 00:17:20,520 --> 00:17:23,040 Speaker 4: I think we deserve better, and we don't actually have 367 00:17:23,119 --> 00:17:25,800 Speaker 4: to tell anybody that we're going through this process because 368 00:17:25,800 --> 00:17:29,399 Speaker 4: we actually don't owe anybody any kind of explanation, like 369 00:17:29,480 --> 00:17:32,040 Speaker 4: it's not their business. And as much as I'm very 370 00:17:32,119 --> 00:17:35,800 Speaker 4: open about finances and you know, talking about money like 371 00:17:36,040 --> 00:17:39,240 Speaker 4: it's still your story, you are absolutely in control of 372 00:17:39,280 --> 00:17:41,359 Speaker 4: who you share that with and who you don't share 373 00:17:41,400 --> 00:17:43,560 Speaker 4: that with. And I would hate to think that you 374 00:17:43,840 --> 00:17:46,960 Speaker 4: think you owe people in explanation for a decision that 375 00:17:47,000 --> 00:17:49,600 Speaker 4: you are making for the best for you. So I 376 00:17:49,640 --> 00:17:51,639 Speaker 4: think it's also important that you know what, if you 377 00:17:51,680 --> 00:17:54,560 Speaker 4: want to explain it to people, absolutely all powered to you. 378 00:17:54,640 --> 00:17:57,720 Speaker 4: It is absolutely worth having that conversation, and I think 379 00:17:57,760 --> 00:18:00,680 Speaker 4: you'll find that more people are supportive of you then less. 380 00:18:00,960 --> 00:18:03,160 Speaker 4: But at the same time, I think that you need 381 00:18:03,200 --> 00:18:05,760 Speaker 4: to also remember like, this is your journey. It's not 382 00:18:05,880 --> 00:18:08,840 Speaker 4: somebody else's decision to make, and it's actually up to you. 383 00:18:09,000 --> 00:18:10,719 Speaker 4: But that is my two cents. 384 00:18:11,359 --> 00:18:14,240 Speaker 2: Yeah. Absolutely, Now, if we are in a lot of 385 00:18:14,280 --> 00:18:17,679 Speaker 2: debt and maybe bankruptcy is a little bit intimidating, are 386 00:18:17,720 --> 00:18:21,560 Speaker 2: there other options that are available to potentially help us out. Yes, 387 00:18:21,640 --> 00:18:24,600 Speaker 2: of course, And this is where we can actually take 388 00:18:24,640 --> 00:18:27,440 Speaker 2: control and instead of putting our heads in the sand. 389 00:18:27,480 --> 00:18:29,800 Speaker 2: I say that so often, but putting our heads in 390 00:18:29,840 --> 00:18:31,160 Speaker 2: the sand and feeling like we. 391 00:18:31,160 --> 00:18:33,679 Speaker 4: Aren't in control. There are a few things that we 392 00:18:33,720 --> 00:18:36,280 Speaker 4: can do. There are three official ones, but to be honest, 393 00:18:36,280 --> 00:18:38,520 Speaker 4: if you've got debts that can't be repaid, the first 394 00:18:38,600 --> 00:18:40,680 Speaker 4: thing I would be doing is jumping on the phone 395 00:18:40,880 --> 00:18:43,240 Speaker 4: and jumping on the phone if it's a phone bill, 396 00:18:43,320 --> 00:18:45,639 Speaker 4: if it is a personal loan, if it is a 397 00:18:45,720 --> 00:18:48,560 Speaker 4: water bill or an electricity bill, and talking to the 398 00:18:48,560 --> 00:18:51,359 Speaker 4: people at that company and saying, hey, JS, I'm really sorry. 399 00:18:51,440 --> 00:18:54,760 Speaker 4: I'm actually in a really sticky situation like COVID's really 400 00:18:54,760 --> 00:18:57,480 Speaker 4: affected me, or I've lost my job, or I'm going 401 00:18:57,520 --> 00:19:00,879 Speaker 4: through this personal situation and I'm just wondering what you 402 00:19:00,920 --> 00:19:03,520 Speaker 4: can do for me to make this a bit easier, like, 403 00:19:03,560 --> 00:19:06,240 Speaker 4: can we change the terms of the agreement, can we 404 00:19:06,880 --> 00:19:11,000 Speaker 4: discount it significantly, or just negotiating with them potentially what 405 00:19:11,080 --> 00:19:13,359 Speaker 4: you can do? I promise the people on the end 406 00:19:13,400 --> 00:19:16,399 Speaker 4: of the phone are so understanding and really want to 407 00:19:16,440 --> 00:19:19,879 Speaker 4: help you. But there are a few quote official things 408 00:19:19,880 --> 00:19:22,680 Speaker 4: that we could do. The first thing is a debt agreement, 409 00:19:23,000 --> 00:19:24,960 Speaker 4: and this is where you and your creditors come to 410 00:19:25,000 --> 00:19:27,160 Speaker 4: an agreement on the amount of money that you can 411 00:19:27,240 --> 00:19:30,280 Speaker 4: realistically afford over a step period of time. So this 412 00:19:30,400 --> 00:19:32,199 Speaker 4: is where I was saying, get on the phone, have 413 00:19:32,240 --> 00:19:35,240 Speaker 4: a chat with them, ask if you can negotiate something 414 00:19:35,359 --> 00:19:38,240 Speaker 4: a little bit different to what you currently owe, because 415 00:19:38,240 --> 00:19:41,000 Speaker 4: what you currently owe isn't going to get paid. And 416 00:19:41,080 --> 00:19:43,240 Speaker 4: I think they're being really honest about that and calling 417 00:19:43,280 --> 00:19:45,479 Speaker 4: and being like, hey, v yep, so that thing I 418 00:19:45,520 --> 00:19:47,560 Speaker 4: owe you not going to get paid. What would you 419 00:19:47,560 --> 00:19:50,240 Speaker 4: compromise on. How can we make this work for both 420 00:19:50,280 --> 00:19:52,520 Speaker 4: of us so that you get paid and we don't 421 00:19:52,520 --> 00:19:54,639 Speaker 4: have to go to court? And they go, yeah, okay, 422 00:19:54,760 --> 00:19:57,679 Speaker 4: no problems, Jess. I'd actually take fifty bucks from you 423 00:19:57,760 --> 00:20:00,400 Speaker 4: instead of the full hundred and you go okay, well, yep, 424 00:20:00,440 --> 00:20:03,040 Speaker 4: that's more reasonable. Can I have three months. I think 425 00:20:03,040 --> 00:20:05,320 Speaker 4: it's really important to know that as much as you 426 00:20:05,880 --> 00:20:08,720 Speaker 4: might feel really out of control, you're still in power, 427 00:20:08,880 --> 00:20:11,760 Speaker 4: like you still actually have control, and you still have 428 00:20:11,840 --> 00:20:15,040 Speaker 4: a voice, and you still have the respect of others. 429 00:20:14,760 --> 00:20:16,600 Speaker 3: And you can actually ask for things. 430 00:20:16,720 --> 00:20:19,760 Speaker 4: And I think that often when we owe money, there's 431 00:20:19,800 --> 00:20:22,040 Speaker 4: a lot of shame associated with that because you go, 432 00:20:22,119 --> 00:20:23,639 Speaker 4: oh my god, I don't want to call them. I 433 00:20:23,680 --> 00:20:25,959 Speaker 4: owe them, you know, ten thousand dollars and it's just 434 00:20:26,000 --> 00:20:29,159 Speaker 4: not going to happen. Have the conversation. I promise you 435 00:20:29,240 --> 00:20:31,600 Speaker 4: it is not as overwhelming as you think it is. 436 00:20:32,080 --> 00:20:34,359 Speaker 2: I've seen a few people talk about this in the group, 437 00:20:34,840 --> 00:20:39,240 Speaker 2: particularly around when loans or money that they've owed have 438 00:20:39,760 --> 00:20:42,760 Speaker 2: been passed along to debt collectors, and people have been 439 00:20:42,800 --> 00:20:46,200 Speaker 2: able to negotiate with debt collectors, sometimes to knock thousands 440 00:20:46,240 --> 00:20:47,080 Speaker 2: of dollars. 441 00:20:46,960 --> 00:20:47,520 Speaker 1: Yeah, debt. 442 00:20:48,400 --> 00:20:51,720 Speaker 4: If it's at that point, absolutely try and negotiate and 443 00:20:51,840 --> 00:20:54,040 Speaker 4: ask them what they take, even put a number on 444 00:20:54,080 --> 00:20:58,800 Speaker 4: the table. I know people personally who have had you know, example, 445 00:20:58,920 --> 00:21:02,359 Speaker 4: debt collector coming from eleven thousand dollars and they say, okay, cool, 446 00:21:02,760 --> 00:21:05,520 Speaker 4: I'm actually really unable to pay that right now. I 447 00:21:05,560 --> 00:21:07,960 Speaker 4: know you're asking for it. There's six thousand dollars in 448 00:21:07,960 --> 00:21:10,080 Speaker 4: my savings account right now. If I give you that, 449 00:21:10,119 --> 00:21:12,440 Speaker 4: can we call it even? And debt collectors have actually 450 00:21:12,520 --> 00:21:15,320 Speaker 4: said yes to that historically. I'm not saying it will 451 00:21:15,359 --> 00:21:18,280 Speaker 4: work every single time, but if you don't ask, you're 452 00:21:18,359 --> 00:21:19,160 Speaker 4: never gonna get. 453 00:21:19,560 --> 00:21:22,320 Speaker 2: Yeah. Absolutely, what else can we do if we are 454 00:21:22,320 --> 00:21:24,440 Speaker 2: in a pile of debt trying to dig our way out. 455 00:21:24,600 --> 00:21:27,480 Speaker 4: So the next one is a personal insolvency agreement, and 456 00:21:27,520 --> 00:21:30,320 Speaker 4: this is a legally binding agreement where all of your 457 00:21:30,359 --> 00:21:32,880 Speaker 4: debts are paid in installments and it is agreed upon 458 00:21:32,920 --> 00:21:35,520 Speaker 4: by both you and your creditors. So similar to a 459 00:21:35,560 --> 00:21:38,600 Speaker 4: debt agreement, but it's a personal insolvency agreement. And the 460 00:21:38,640 --> 00:21:41,760 Speaker 4: third one is a temporary debt protection for twenty one days. 461 00:21:41,960 --> 00:21:43,720 Speaker 3: That means that you're protected. 462 00:21:43,240 --> 00:21:47,920 Speaker 4: For three weeks and unsecured creditors can't take action against you. Now, 463 00:21:47,960 --> 00:21:50,080 Speaker 4: I'm not saying that that's the be all, end all, 464 00:21:50,200 --> 00:21:52,760 Speaker 4: It's just a step that you can take if everything 465 00:21:52,840 --> 00:21:55,199 Speaker 4: is really overwhelming and you need a little bit of 466 00:21:55,240 --> 00:21:58,040 Speaker 4: time and you actually need to sort your stuff out. 467 00:21:58,119 --> 00:21:59,560 Speaker 3: That can be really powerful. 468 00:22:00,160 --> 00:22:02,639 Speaker 2: Amazing. Now, I know it's a little bit personal, but 469 00:22:02,680 --> 00:22:05,280 Speaker 2: there are probably quite a few people listening right now 470 00:22:05,320 --> 00:22:07,560 Speaker 2: who might have, say, five thousand dollars of debt and 471 00:22:07,560 --> 00:22:10,000 Speaker 2: are wondering if bankruptcy is a good idea because they're 472 00:22:10,000 --> 00:22:12,600 Speaker 2: struggling to pay their bills, put food on the table, 473 00:22:12,640 --> 00:22:14,960 Speaker 2: things like that. Can you give me a sense of 474 00:22:15,400 --> 00:22:18,919 Speaker 2: what level of debt most people would need to be 475 00:22:19,000 --> 00:22:21,600 Speaker 2: in or would find themselves in before they do actually 476 00:22:21,640 --> 00:22:23,399 Speaker 2: look into filing for bankruptcy. 477 00:22:23,560 --> 00:22:27,679 Speaker 4: Yeah, again, this is different for absolutely everybody. For some people, 478 00:22:27,760 --> 00:22:30,720 Speaker 4: five thousand dollars can be paid off in you know, 479 00:22:30,880 --> 00:22:33,439 Speaker 4: a year or two years, and for others that is 480 00:22:33,480 --> 00:22:36,240 Speaker 4: going to be absolutely crippling. And it is not for 481 00:22:36,359 --> 00:22:38,720 Speaker 4: me to say what is right or what is wrong. 482 00:22:39,320 --> 00:22:41,520 Speaker 4: I think we need to think about the ramifications that 483 00:22:41,560 --> 00:22:44,600 Speaker 4: we went through before, because obviously, if it's five grand, 484 00:22:44,720 --> 00:22:47,119 Speaker 4: can we find a way to pay that back. We 485 00:22:47,200 --> 00:22:50,399 Speaker 4: are definitely not doing this podcast to promote bankruptcy, but 486 00:22:50,600 --> 00:22:53,600 Speaker 4: more educate you around this. But if it's five grand, 487 00:22:53,840 --> 00:22:55,680 Speaker 4: could you pick up an extra job or a few 488 00:22:55,720 --> 00:22:58,359 Speaker 4: extra shifts at work? Could you do what Jess does 489 00:22:58,400 --> 00:23:00,520 Speaker 4: and sell a whole heap of things on pop or 490 00:23:00,560 --> 00:23:03,760 Speaker 4: Facebook market place and start smashing down the debt that way. 491 00:23:04,119 --> 00:23:06,840 Speaker 4: Could you do some side hustles, Could you jump on 492 00:23:06,840 --> 00:23:09,720 Speaker 4: an air tasker and do a few jobs. I'm not 493 00:23:09,880 --> 00:23:12,760 Speaker 4: here going okay, cool, like you're absolutely helpless. I think 494 00:23:12,800 --> 00:23:16,800 Speaker 4: that everybody has an ability to generate additional income. But 495 00:23:17,640 --> 00:23:21,120 Speaker 4: just as an fyi, as of January twenty twenty one, 496 00:23:21,280 --> 00:23:23,840 Speaker 4: so this year, my friends, if you are listening today, 497 00:23:24,280 --> 00:23:27,520 Speaker 4: the minimum debt amount that can trigger a bankruptcy is 498 00:23:27,560 --> 00:23:30,080 Speaker 4: actually ten thousand dollars, so you do need to be 499 00:23:30,160 --> 00:23:34,000 Speaker 4: in a little bit more significant debt. But again, if 500 00:23:34,000 --> 00:23:37,080 Speaker 4: it was ten grand, I'd really be trying to hustle 501 00:23:37,119 --> 00:23:40,320 Speaker 4: my way out of that situation and working out the 502 00:23:40,400 --> 00:23:44,440 Speaker 4: time on that, because don't forget that bankruptcy sticks around 503 00:23:44,560 --> 00:23:47,439 Speaker 4: for a minimum of three years and one day. So 504 00:23:47,520 --> 00:23:50,119 Speaker 4: if you could get out of debt by creating an 505 00:23:50,160 --> 00:23:52,200 Speaker 4: agreement or a plan or a way to get out 506 00:23:52,240 --> 00:23:54,679 Speaker 4: of that in less time than that, I would argue 507 00:23:54,800 --> 00:23:58,160 Speaker 4: that's a really great way to avoid going bankrupt because, 508 00:23:58,200 --> 00:24:00,840 Speaker 4: as I said before, it sticks around and you do 509 00:24:01,000 --> 00:24:03,560 Speaker 4: go on that register forever, and it does impact your 510 00:24:03,600 --> 00:24:06,080 Speaker 4: ability to get a mortgage and say for a home, 511 00:24:06,160 --> 00:24:09,199 Speaker 4: and I think it's really important to understand that. But 512 00:24:09,320 --> 00:24:11,960 Speaker 4: as I said before, I've met people in very deep 513 00:24:12,080 --> 00:24:15,639 Speaker 4: debt before where bankruptcy just makes sense because you do 514 00:24:15,720 --> 00:24:17,280 Speaker 4: the numbers and you work it out and you're like, 515 00:24:17,320 --> 00:24:19,879 Speaker 4: oh my gosh, I'm so sorry, my friend. But like, 516 00:24:20,000 --> 00:24:22,520 Speaker 4: if we did this and we started paying it back 517 00:24:22,560 --> 00:24:25,360 Speaker 4: today at the amount that they're asking you to pay 518 00:24:25,400 --> 00:24:27,879 Speaker 4: it back, it's going to take thirty plus years. And 519 00:24:27,920 --> 00:24:29,720 Speaker 4: they go, oh, I can't, I can't do that. That's 520 00:24:29,760 --> 00:24:31,879 Speaker 4: so overwhelming, and I get it, and that's when I 521 00:24:31,920 --> 00:24:35,000 Speaker 4: think I would start considering something like this. Yes, you 522 00:24:35,000 --> 00:24:38,240 Speaker 4: can absolutely consider it for less money. As I said before, 523 00:24:38,280 --> 00:24:41,720 Speaker 4: the minimum amount is ten grand, but I really would 524 00:24:41,760 --> 00:24:44,720 Speaker 4: be trying to avoid it as a first step instead 525 00:24:44,720 --> 00:24:46,200 Speaker 4: of burying our heads in the sand. 526 00:24:46,520 --> 00:24:47,440 Speaker 3: I promise you. 527 00:24:47,520 --> 00:24:51,080 Speaker 4: In twenty twenty one, it is so easy to find 528 00:24:51,119 --> 00:24:55,280 Speaker 4: additional side hustles or ways to generate income that don't 529 00:24:55,320 --> 00:24:58,760 Speaker 4: require any skill, like it is sometimes about running errands. 530 00:24:58,880 --> 00:25:00,720 Speaker 4: Like I actually have a girl I'm not going to 531 00:25:00,800 --> 00:25:02,639 Speaker 4: name her, but she's a wizard and I know she 532 00:25:02,680 --> 00:25:06,760 Speaker 4: listens to this podcast and she actually started cleaning houses 533 00:25:06,760 --> 00:25:08,720 Speaker 4: on the weekends because she was like, oh my gosh, 534 00:25:08,760 --> 00:25:11,960 Speaker 4: I've got myself into so much personal debt that that 535 00:25:12,119 --> 00:25:14,320 Speaker 4: was her way of getting out of it. And I 536 00:25:14,600 --> 00:25:17,760 Speaker 4: was so proud of her because also every single time 537 00:25:17,840 --> 00:25:20,160 Speaker 4: she cleaned a house, she was so proud of herself 538 00:25:20,200 --> 00:25:22,560 Speaker 4: because she knew what that money was going towards, and 539 00:25:22,600 --> 00:25:25,040 Speaker 4: she felt like she was really changing her life and 540 00:25:25,119 --> 00:25:27,959 Speaker 4: changing her money story. And I just I love that 541 00:25:28,080 --> 00:25:30,639 Speaker 4: as well. I don't think it's about shaming what the 542 00:25:30,720 --> 00:25:32,840 Speaker 4: job is. I think it's about embracing it and being like, 543 00:25:32,880 --> 00:25:33,200 Speaker 4: oh my. 544 00:25:33,200 --> 00:25:34,400 Speaker 3: Gosh, what a hustler. 545 00:25:34,520 --> 00:25:37,600 Speaker 4: I love that, like it's something that we can all do, 546 00:25:37,840 --> 00:25:38,760 Speaker 4: if that makes sense. 547 00:25:39,240 --> 00:25:41,800 Speaker 2: Yeah, And more power to those people who are taking 548 00:25:41,840 --> 00:25:43,679 Speaker 2: on jobs that are different from what maybe they do 549 00:25:43,720 --> 00:25:45,800 Speaker 2: in their day job to make whose ends me or 550 00:25:45,840 --> 00:25:48,080 Speaker 2: to make that change in their life. I think you 551 00:25:48,119 --> 00:25:50,800 Speaker 2: should be taking a lot of pride in your commitment 552 00:25:50,880 --> 00:25:53,320 Speaker 2: and your dedication, and even if you're filing for bankruptcy, 553 00:25:53,320 --> 00:25:54,679 Speaker 2: if you've come to the end of the line and 554 00:25:54,680 --> 00:25:57,560 Speaker 2: that's the choice that you have to make, be proud 555 00:25:57,600 --> 00:25:58,760 Speaker 2: of taking control and doing it. 556 00:25:58,920 --> 00:26:00,960 Speaker 3: Yeah, exactly, you and. 557 00:26:00,920 --> 00:26:02,840 Speaker 2: I guess before we head off, I just wanted to 558 00:26:02,880 --> 00:26:05,440 Speaker 2: ask you v you know, with all of these kind 559 00:26:05,480 --> 00:26:07,919 Speaker 2: of more heavy things that we've spoken about. And you know, 560 00:26:08,200 --> 00:26:12,000 Speaker 2: with any large amount of debt or financial stress, there's 561 00:26:12,040 --> 00:26:14,800 Speaker 2: going to be a really significant mental toll. We know 562 00:26:14,880 --> 00:26:18,520 Speaker 2: there's a direct link to mental health and financial distress. 563 00:26:18,920 --> 00:26:21,600 Speaker 2: Is there anything you can pass along to our community, 564 00:26:21,600 --> 00:26:24,439 Speaker 2: to anyone who might be struggling financially or might be 565 00:26:24,440 --> 00:26:27,360 Speaker 2: considering bankruptcy, what would you say to them? 566 00:26:27,600 --> 00:26:29,720 Speaker 4: So first things first, to do your research, work out 567 00:26:29,760 --> 00:26:31,679 Speaker 4: if it is the right decision for you. It is 568 00:26:31,760 --> 00:26:34,120 Speaker 4: not a get out of jail free card from monopoly, 569 00:26:34,200 --> 00:26:36,879 Speaker 4: my friends. It is not as easy as that. But 570 00:26:37,000 --> 00:26:38,919 Speaker 4: if you've come to the conclusion that you need to 571 00:26:38,920 --> 00:26:42,280 Speaker 4: file for bankruptcy, I'm so bloody proud of you. I 572 00:26:42,359 --> 00:26:44,600 Speaker 4: am so proud that you have made that decision and 573 00:26:44,640 --> 00:26:46,879 Speaker 4: we have gotten this far, and it is something that 574 00:26:46,920 --> 00:26:49,600 Speaker 4: you are doing for future. You make sure that it 575 00:26:49,640 --> 00:26:52,880 Speaker 4: doesn't happen again. Put yourself in a position where you go, yep, cool, 576 00:26:52,960 --> 00:26:55,439 Speaker 4: this is the clean slate that I deserve, and I 577 00:26:55,480 --> 00:26:58,560 Speaker 4: am going to take every opportunity to educate myself and 578 00:26:58,600 --> 00:27:01,679 Speaker 4: put myself in a better financial position. But listening to 579 00:27:01,720 --> 00:27:04,040 Speaker 4: episodes like this is a really great start doing your 580 00:27:04,040 --> 00:27:07,719 Speaker 4: own research. The Australian Financial Security Authority has lots of 581 00:27:07,720 --> 00:27:11,520 Speaker 4: information and similarly, talking into a counselor from our friends 582 00:27:11,560 --> 00:27:14,360 Speaker 4: at the National Debt Helpline can be really useful if 583 00:27:14,359 --> 00:27:16,639 Speaker 4: you need to talk to someone about your options. I 584 00:27:16,800 --> 00:27:20,719 Speaker 4: genuinely think if you are seriously considering bankruptcy as a 585 00:27:20,800 --> 00:27:23,359 Speaker 4: viable option for you, that it would be a no 586 00:27:23,520 --> 00:27:25,240 Speaker 4: brainer to pick up the phone and talk to the 587 00:27:25,320 --> 00:27:27,120 Speaker 4: National Debt Helpline. 588 00:27:26,880 --> 00:27:29,560 Speaker 2: And they are free. Will pop their information in the description. 589 00:27:29,840 --> 00:27:30,840 Speaker 3: Yes, talk to them. 590 00:27:30,880 --> 00:27:33,280 Speaker 4: They are so kind, they are so knowledgeable. They are 591 00:27:33,280 --> 00:27:35,080 Speaker 4: going to make sure that you are making the right 592 00:27:35,119 --> 00:27:37,800 Speaker 4: decision for you and assist you in that process. I 593 00:27:37,840 --> 00:27:40,000 Speaker 4: promise you you do not have to do any of 594 00:27:40,040 --> 00:27:42,760 Speaker 4: these things alone. Obviously we'll link them in the show 595 00:27:42,800 --> 00:27:45,840 Speaker 4: notes as just said before, but please don't feel like 596 00:27:46,440 --> 00:27:49,040 Speaker 4: you need to be super broke or a certain type 597 00:27:49,040 --> 00:27:51,160 Speaker 4: of person to be calling these places. 598 00:27:51,200 --> 00:27:52,160 Speaker 3: Like if I was. 599 00:27:52,080 --> 00:27:55,600 Speaker 4: In that situation, those are the people I would personally 600 00:27:55,640 --> 00:27:58,680 Speaker 4: reach out to, like I have so much respect for 601 00:27:58,720 --> 00:28:02,240 Speaker 4: them and what they do is so so special. And 602 00:28:02,280 --> 00:28:04,480 Speaker 4: then if you're all set and you've decided that that's 603 00:28:04,520 --> 00:28:06,320 Speaker 4: what you're going to do, then all you need to 604 00:28:06,359 --> 00:28:09,440 Speaker 4: do is head to the Australian Financial Security Authority or 605 00:28:09,480 --> 00:28:14,199 Speaker 4: the AFSA website and submit a bankruptcy form online and 606 00:28:14,240 --> 00:28:16,520 Speaker 4: you just need to set up an account to get started. 607 00:28:16,840 --> 00:28:20,160 Speaker 4: It's important to remember to detail every single little part 608 00:28:20,240 --> 00:28:23,239 Speaker 4: of the debts and why you're applying for bankruptcy, and 609 00:28:23,280 --> 00:28:24,679 Speaker 4: if you do forget, let your. 610 00:28:24,520 --> 00:28:26,840 Speaker 3: Trustee know as soon as possible. 611 00:28:27,400 --> 00:28:30,640 Speaker 4: And then if your application is accepted, the AFSA will 612 00:28:30,640 --> 00:28:34,280 Speaker 4: send both you and your creditors that approve all in writing. 613 00:28:34,840 --> 00:28:37,879 Speaker 4: If not, you'll also receive written word from the AFSA 614 00:28:38,000 --> 00:28:40,920 Speaker 4: detailing the reason why. So they'll absolutely let you know 615 00:28:40,960 --> 00:28:44,640 Speaker 4: if you're approved or not approved, always in writing. Also 616 00:28:44,680 --> 00:28:48,080 Speaker 4: really important, you can select a private trustee or if 617 00:28:48,120 --> 00:28:50,960 Speaker 4: you don't have that, they will select one for you, 618 00:28:51,000 --> 00:28:53,600 Speaker 4: and as we've mentioned, they're going to work really closely 619 00:28:53,680 --> 00:28:57,120 Speaker 4: with you and your creditors throughout this entire process. Like, 620 00:28:57,160 --> 00:28:58,920 Speaker 4: this is not a process that you have to go 621 00:28:59,040 --> 00:29:01,920 Speaker 4: through alone. Police don't think it is at all. It 622 00:29:02,040 --> 00:29:05,160 Speaker 4: is absolutely not something that anyone has to do alone. 623 00:29:05,400 --> 00:29:08,080 Speaker 2: Okay, amazing. Like we said, check out the show notes. 624 00:29:08,080 --> 00:29:10,720 Speaker 2: We'll have as many resources as we can think of down. 625 00:29:10,560 --> 00:29:13,320 Speaker 3: There, down pack it for their friends. 626 00:29:13,440 --> 00:29:16,040 Speaker 2: Absolutely, the National Debt Helpline, we talk about them all 627 00:29:16,080 --> 00:29:18,840 Speaker 2: the time. They're really fantastic and they're a free resource. 628 00:29:19,000 --> 00:29:21,200 Speaker 2: And if you're in a lot of debt, utilizing any 629 00:29:21,240 --> 00:29:23,360 Speaker 2: of those free resources that you can get your hands on, 630 00:29:23,400 --> 00:29:25,160 Speaker 2: I think is a really fantastic thing to do. 631 00:29:25,560 --> 00:29:26,240 Speaker 3: Thanks Jess. 632 00:29:26,280 --> 00:29:29,080 Speaker 4: But as always, just before we head off, we'd like 633 00:29:29,120 --> 00:29:32,400 Speaker 4: to acknowledge and pay respect to Australia's Aboriginal and Torro 634 00:29:32,480 --> 00:29:36,400 Speaker 4: Strait islander people's. They're the traditional custodians of the lands, 635 00:29:36,440 --> 00:29:39,880 Speaker 4: the waterways and the skies all across Australia. We thank 636 00:29:39,960 --> 00:29:41,840 Speaker 4: you for sharing and for caring for the land on 637 00:29:41,880 --> 00:29:44,360 Speaker 4: which we are able to learn. We pay our respects 638 00:29:44,360 --> 00:29:46,960 Speaker 4: to elders past and present, and we share our friendship 639 00:29:47,000 --> 00:29:48,240 Speaker 4: and our kindness. 640 00:29:48,480 --> 00:29:50,959 Speaker 2: The advice shared on She's on the Money is generally 641 00:29:51,040 --> 00:29:54,320 Speaker 2: nature and does not consider your individual circumstances. She's on 642 00:29:54,360 --> 00:29:57,080 Speaker 2: the Money exists purely for educational purposes and should not 643 00:29:57,080 --> 00:29:59,840 Speaker 2: be relied upon to make an investment or a financial decision, 644 00:30:00,240 --> 00:30:03,480 Speaker 2: and we promise Victoria Divine is an authorized representative of 645 00:30:03,480 --> 00:30:07,600 Speaker 2: Australia Pacific Funds Management Proprietary Limited ABM three four one 646 00:30:07,680 --> 00:30:10,640 Speaker 2: three two four six three two five seven, afs L 647 00:30:10,760 --> 00:30:12,280 Speaker 2: three three nine one five one. 648 00:30:12,360 --> 00:30:15,240 Speaker 4: OK, you'd We'll see you next week. Guys. 649 00:30:15,240 --> 00:30:19,240 Speaker 2: Bye,