When The Fun Catches Up

Sometimes in life, it is wonderful to be foot loose and fancy-free and like everything we do, there are consequences to pay. I’m not trying to be the fun police here but just think about things for a moment.

When you leave school or graduate from university, you have a trillion things you have been dying to buy for yourself whether it’s a car without the rust, or some designer footwear without even asking the price, your first pay packet is probably gone before you get it. But then that may be the catalyst to a roller coaster ride of bad habits, spending too flippantly and enjoy the good life without a care in the world; until your world is turned upside down.

So you get a credit card to assist you to live life in the style you dreamt of for years. You can keep up with your peers. Your new car payments may be high but the benefits seem worth it. You seemed to have enough money to keep life running smoothly and your bills are getting paid. What seems to be the problem?

Then one morning you wake up feeling unwell and unable to go to work. It will just take a day or two to recover, or maybe a week. And then you realise, it may take two weeks. The prognosis wasn’t looking good.  Your health takes a rapid decline, you lose your job, your family has to help out to pay for the car, and other bills are gradually getting further and further in arrears. You ask yourself “how did this happen?” You wake to the reality that you have slid into a muddy puddle of helplessness and you’re broke. Depression sets in. You can longer keep up with your peers.  It may feel like you have been handed a death sentence.

All the hard work you invested into building a credit rating has slipped away; all the bills you scraped together funds to ensure they were paid on time and the savings plan that was no longer sustainable. Your life may feel like it has hit the lowest point and you are not sure where to turn without the fear of another letter of demand, or harassing phone call.

The good news is that the world hasn’t come to an end and you will make it through the dark days of bankruptcy with your sanity intact. It won’t be easy. You’ll have to make some changes to your life. Your credit rating can be rebuilt.

You need some professional support to assist you through the bankruptcy and pull you through to a brand new world. You don’t need to travel this path alone and it is too complex to tackle yourself. Every case is different and without that professional guidance, the outcome can be vastly different. You may lose property, you will have a court case to attend, you may lose your rights and it may be tough.

Declaring bankruptcy is a 3 year process and it will wipe out most of your debts. However, there are some debts that cannot be discharged at all, including:
  • child support
  • student loans
  • SPURS
 
Recovery from bankruptcy
Building your credit rating wasn’t an overnight process and so rebuilding is going to take a concentrated effort to succeed.  Here are a few tips to recovery:
  • Get a debit card which will only allow you to spend when you have funds in the account and avoid the overspending.
  • Pay your bills on time which will build your new credit rating.
  • Try to keep all your finances with one institution where you will find it easier to track and should lead to a better option when you want to borrow money later.