Case study: Mei Ling and Matt

A fresh start after bankruptcy

Mei Ling and Matt are a married couple who rent a flat in Gosford NSW. Both worked full time until two years ago when Matt lost his job. Mei Ling now works part time earning less than $40,000 per year.

For two years they tried to survive on Mei Ling’s wage, struggling to make repayments on their overdue credit cards and loans. They ended up with unsecured debts of over $65,000.

The only assets they owned were a car worth $5,000 and general household goods (fridge, couch, bed, etc).

The pressure from their creditors became too much to handle. Debt collectors and process servers were constantly calling on them. Their electricity was turned off a few times and they stopped answering phone calls because it always seemed to be bad news. Matt’s health was also suffering, and he was treated for depression. Most nights Mei Ling would end up in tears thinking about their situation.

They finally decided to see a financial counsellor. There was no charge for this service. The financial counsellor looked through their finances and suggested they consider filing for bankruptcy.

Matt and Mei Ling went home and looked in detail at the AFSA website. They read all about their options and the consequences of bankruptcy. The AFSA website showed that they would be able to keep their car because it was worth less than the set amount. They read they could also keep their household goods. In the end, they decided that bankruptcy would be the best option for them.

After completing the Bankruptcy Form online, they submitted it to AFSA. There was no fee to apply for bankruptcy.

Bankruptcy is not the right option for everyone, but for Matt and Mei Ling it provided a way out of their debt crisis. They made a fresh financial start and regained control over their lives. This provided enormous relief to the couple. Matt was able to stop worrying about debt and find a new job.

Their bankruptcies ended 2 years ago. They continue to regularly see a financial counsellor and they keep to a budget. This keeps their finances under control, so they do not find themselves in the same position in the future.

Their new budget also allows for some savings to be put aside from their income and for the first time in 10 years, Mei Ling and Matt are planning an overseas holiday in the not-too-distant future.

*These case studies do not constitute legal or financial advice. You should consider whether the options referred to in the case studies are appropriate for you, and seek advice if necessary, before taking any action.