A 24-year-old Queensland woman who racked up $75,000 in debt and lost her job has revealed how bankruptcy helped her take control of her life.
Brisbane woman Chantelle found herself in financial trouble after losing her full-time job while trying to pay off a debt equal to her annual salary.
The unemployed 24-year-old owed the bank $75,000 after taking out two personal loans and maxing out a few credit cards.
She desperately tried to find another job, but ultimately declared bankruptcy in September.
In a video shared to TikTok on Monday, Chantelle revealed how bankruptcy helped her despite initially being “so against” the idea.
Brisbane woman Chantelle declared bankruptcy at the age of 24 after experiencing financial difficulties when she lost her job and built up a debt equal to her annual salary
“If anyone is considering bankruptcy, I’m going to tell you my story and how it helped me and I hope it helps you make your decision,” Chantelle said.
‘When my partner brought up the idea of me going bankrupt, I was so against it at first and thought, ‘Absolutely not.’
“I just wanted to push through, cut back and save… but in the end it’s not really the best thing.”
She noted that the bank had given her a “ridiculous” amount of money and was surprised at how quickly she was able to spend it.
Chantelle said yes $75,000 in debt – “a lot for one person” – and struggled to find a job and a place to live, as well as having no savings or help from family.
The young woman explored her options and even called the bank because she was in financial difficulties and could not afford her repayments.
“I had called the banks and thought, ‘Please, I’m in financial trouble, I can’t afford this,’” she said.
‘They gave me useless options where the repayments were left behind for a month or two and I then had to pay double. So it didn’t help.’
Chantelle said it was ‘impossible’ to keep up with her repayments as she owed $200 a week on each loan, on top of her credit card debt and weekly rent.
‘It was just impossible. I wasn’t getting anywhere, and I was trying to use one person’s money to pay the other person,” Chantelle said.
‘Just the interest per month, I pay for nothing. It was so frustrating and I was really upset.”
Chantelle said she could ‘scrimp and save’ and be ‘miserable’, or go bankrupt and opt for an immediate ‘fresh start’.
‘The breaking point was when you sat down and realized, “I only live once, I’m going to die one day, who cares if I was bankrupt?” No one cares,” Chantelle said.
‘I can scrimp and save and be miserable for seven years and start from scratch again, or I can put it all behind me and start over now and enjoy the next seven years of my life, so f**k it. ‘
The 24-year-old explained that she was initially against the idea of declaring bankruptcy, but wanted a fresh start after realizing she couldn’t pay off her two personal loans and numerous credit cards.
Chantelle claims to have learned her lesson and is dealing with the consequences of the bankruptcy.
Declaring bankruptcy is a legal process in which an individual who is unable to pay their debts is released from their obligations, giving them the opportunity for a fresh start, but in return certain restrictions.
The process normally takes three years and one day and affects a person’s ability to apply for credit, travel abroad or even obtain certain types of work.
A bankrupt’s name will also appear on Australia’s National Personal Insolvency Index (NPII).
A person must obtain permission from their registered bankruptcy trustee if they wish to travel abroad.
The administrator also has the authority to sell the assets of the person who is declared bankrupt.
In another video, Chantelle said she took out one of the loans to go on holiday abroad with her boyfriend, an international student who works part-time as an Uber Eats driver.
Chantelle believed she could repay the loan once the couple returned home because she had been promoted at work and would be working overtime.
However, upon her return she became very ill and realized that she could not go to work due to her illness.
‘After the holidays I got Covid and something went wrong. I started feeling faint all the time and my vision became blurry,” Chantelle said.
‘I couldn’t concentrate and didn’t register where I was. It started giving me panic attacks and scaring me.
‘I took all my sick leave, went to doctors and even went to a long Covid clinic, but no one could help.’
The young woman followed a management plan and reduced her hours, but her health did not improve and eventually lost her job because working from home was not an option in her role.
Chantelle said she had no ‘savings’ and regularly visited doctors to get her health back on track, all of which ‘cost money’.
She and her partner also faced a $250 per week rent increase and had to find a cheaper alternative, putting them further into debt.
‘We then had to move and buy furniture. After six months, I was still trying to find a job, using credit to pay rent and food and using one loan to pay for another, and it started snowballing,” Chantelle said.
Australian Financial Security Authority statistics show personal bankruptcies across Australia increased by 17.6 per cent in the quarter to June 2023
The young woman admitted that she had made “poor choices” financially and should have saved money, but did not think she would find herself in this situation because she had a well-paying job.
‘I was fit. I was healthy. I always worked overtime. Because of those choices when something went wrong, I had no safety net and it fell apart so quickly,” Chantelle said.
She encouraged others who were thinking about going bankrupt to do what makes them happy or just do it “for the sake of it.”
Statistics from the Australian Financial Security Authority show that personal bankruptcies across Australia increased by 17.6 per cent in the quarter to June 2023.
There were 2,705 new personal bankruptcies in that period – up from 2,301 in June 2022, of which 1,569 were bankruptcies.
National data shows personal bankruptcies have increased in all states and territories except South Australia and Western Australia, where rates have remained stable.