Real Stories: Bankruptcy was the right choice for Melissa

Melissa had already accumulated a lot of debt by the time she was 26 years old.

Although she had been in work most of the time since leaving school, her full time job as a shop assistant had recently been made part time. Melissa had been trying to get a second job to increase her income but had not, as yet, been successful. She was in the process of applying for assistance with Centrelink but was not sure how much financial assistance she would receive as her current work hours fluctuated regularly.

Her dwindling work hours were making it impossible to cover her car repayments and rent. Her credit card debts had grown to $23, 000 as she had been using her credit cards to pay her utility bills, weekly shopping and social outings, including weekends away with friends.

Eventually her car was repossessed yet she still owed $13,000 to pay out the remainder of the car loan. Melissa was very stressed and depressed about her situation and sought the assistance of a financial counsellor.

After a thorough assessment of her financial situation and careful consideration the financial counsellor suggested the option of Melissa declaring herself bankrupt. Without any assets to sell, and unable to afford the basics of rent, food, transport, utilities or credit card repayments, declaring bankruptcy enabled Melissa to clear the credit card and car loans and allowed her to focus on rebuilding her financial position, as well as learn to live within her means.

“Bankruptcy was my last resort. I was not able to manage my debts - they were getting more and more out of control. Bankruptcy has really given me a fresh start. I know I can’t get a credit card for a few years but I also know the trouble they caused me. I’m getting used to living within a budget and saving for purchases. I’m managing my finances much better now.”

**Please Note:  Since every situation is different the consequences of Bankruptcy mean it is not suitable for everyone. It's important to speak with a financial counsellor to get full and independent advice if considering this option.