What are the main causes of bankruptcy in Australia? Can we do anything to prevent bankruptcy striking our lives? The most common cause of bankruptcy is unemployment, followed by illness and then family breakdowns. While many of these triggers for bankruptcy are not in your hands, how to prepare yourself for financial hardship and handle the outcomes certainly is.
With unemployment rising in Australia, bankruptcy has become more and more common. There are many consequences involved with bankruptcy—it is not an “easy way out.” It puts your major assets, such as a home or vehicle, at risk of being sold to pay back creditors. It will last for a minimum of three years and if your Trustee files an objection against your discharge from bankruptcy, it could last for up to eight years.
CRS is a company geared toward helping clients to manage personal bankruptcy and as such we are aware of the signs of impending bankruptcy. CRS can help you to make the right decision when considering personal bankruptcy and, if possible, help you to avoid it altogether!
Here are three tips to help keep bankruptcy from sneaking up on you:
1.Manage Your Money
Money management is your first method to help prevent bankruptcy. If you set aside money in savings, keep track of purchases and create a weekly budget and stick to it you should keep on the right track. Stay alert and keep up-to-date with your bills so that they do not become unmanageable.
2.Basics Are Your Best Friend
Create money charts on a weekly basis that document your spending. Allocate a monthly allowance based on income coming in and necessities, such as groceries and mortgage repayments, going out. Your plastic cards are not imaginary, they are very real—if you do not stay on top of them the numbers will rack up whether you like it or not. Use your surplus funds from your budget to pay down your debts as much as possible so that should some unforeseen event occur, you have a buffer to help stave off having to declare bankruptcy.
3.Seek Financial Advice
If you are at a loss with numbers and managing your money, look to the experts for help. CRS are insolvency experts and are here to help you if you are floundering in the money-management side of things. If we cannot help you with any of our current services, we can certainly direct you to the right advisors to help you prepare a budget and fortify your finances.
Remember, bankruptcy is most commonly caused by events and circumstances outside of your control. It could be that the difference between riding out financial hardship and succumbing to bankruptcy lies with the decisions that you make today. If you are concerned that you might be heading toward bankruptcy, or simply want more information about bankruptcy and other insolvency options, call CRS on 1800 210 073.