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What is personal bankruptcy?
Bankruptcy is a legal process where you’re declared unable to pay your debts. It can release you from most debts, provide relief and allow you to make a fresh start.
I was drowning in debt and just didn’t’ think there was a way out. People often don’t realise the options that are available. I didn’t. With the right advice, I was able to see my way through what I thought was an impossible situation.
Brett (Client)
Industry
Personal Finance
Background
Brett was a contractor for a mining services company. Over a period of time he had begun living beyond his means, accumulating $150,000 in credit card debt. He did not have an Emergency Fund, and the mine that Brett was working with suddenly terminated all contract workers.
Brett then contacted Rapsey Griffiths to review his financial situation.
Core problem
Brett was unable to service his growing debts and his mortgage on the family home. While out of work, he relied on multiple credit cards to cover mortgage repayments and day to day living and family expenses. On securing a new job, it became clear that he would never be able to pay off his credit card debt, and he feared the family would be left homeless.
The solution
Rapsey Griffiths determined that the best option for Brett was to file a debtor petition for bankruptcy.
- Brett owned a 50% share in his home with his wife, providing $25,000 in equity.
- This share was considered an asset in his bankrupt estate.
- Brett’s wife was consulted and purchased his share in the property for $25,000.
- The trustee transferred all right and title of the property to Brett’s wife, who became sole owner.
The outcome
While bankruptcy seemed like a drastic step, it provided Brett with a way out of his debt crisis and enabled him to continue living with his family in their home.
Brett has now managed to find a job and he has surplus income to live his life. He is actually saving money during bankruptcy and has made a fresh financial start.