Why a Young Australian’s Bankruptcy at 24, Following Unemployment and Accumulating $75,000 in Debt, Turns Out to Be a Life-Changing Decision

A 24-year-old Queensland woman who racked up $75,000 in debt and lost her job has revealed how her bankruptcy helped her regain control of her life.

Brisbane resident Chantelle found herself in financial difficulty after losing her full-time job while trying to pay off debt equivalent 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 look for another job, but ultimately declared bankruptcy in September.

In a video shared to TikTok on Monday, Chantelle revealed how bankruptcy helped her even though she was initially “so against” the idea.

“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 mentioned that I should go bankrupt, at first I was totally against it and said ‘absolutely not.’

“I was just going to muddle through and skimp and save… but in the end, it’s not really any better.” ‘

She noted that the bank gave her a “ridiculous” amount of money and was surprised at how quickly she was able to spend it.

Chantelle said she was A debt of $75,000, which, she admits, is “a lot for a person” who struggles to find a job, housing and who has no savings or family help.

The young woman explored her options and even called the bank, claiming she was in financial difficulty and unable to pay her repayments.

“I had called the banks and said ‘please, I’m in financial difficulty, I can’t afford this’,” she said.

“They offered me unnecessary options that would just cause me to hold off on repayments for a month or two and then have to pay double.” So it wasn’t helpful.

Chantelle said it was “impossible” to keep up with her repayments because she owed $200 a week on each loan, on top of her credit card debt and weekly rent.

“It was simply impossible. I wasn’t going anywhere and I was trying to use one person’s money to pay the other,” Chantelle said.

“Just the interest every month – I pay nothing. It was so frustrating and I was really upset.

Chantelle said she could either “skimp and save” and be “miserable” or declare bankruptcy and opt for an immediate “fresh start.”

“The breaking point is when you sit down and realize, ‘I’ll only live once, I’ll die one day, who cares if I was bankrupt?’ declared Chantelle.

“I can skimp and save and be miserable for seven years and start over or I can drop everything now and start over now and enjoy the next seven years of my life, so fuck 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 must deal with the consequences of declaring bankruptcy.

Bankruptcy is a legal procedure by which a person unable to pay their debts is released from their obligations, giving them the opportunity to make a fresh start, but in return faces certain restrictions.

The process normally lasts three years and one day and affects a person’s ability to apply for credit, travel abroad or even obtain certain types of employment.

The 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 manager also has the power to sell the assets of the person declared bankrupt.

In another video, Chantelle said she took out one of the loans to go on vacation 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, as she had received a promotion at work and would be working overtime.

However, upon her return, she became very ill and found that she could not go to work due to her illness.

“After the holidays, I had Covid and something went wrong. I started feeling weak all the time and my vision was blurry,” Chantelle said.

“I couldn’t concentrate and I didn’t know where I was. It started giving me panic attacks and freaking me out.

“I took all my sick leave, went to the doctor and even went to a long Covid clinic, but no one could help me.”

The young woman followed a management plan and reduced her working hours, but her health did not improve and ultimately lost her job, with working from home not being an option in her role.

Chantelle said she had no “savings” and frequently visited doctors to restore her health – which “cost money”.

She and her partner also faced a $250-a-week rent increase and were forced to find a cheaper alternative, putting them further in debt.

“We then had to move and buy furniture. Then, after six months, I was still trying to find a job, using credit to pay for rent and food and using one loan to pay for another, and it snowballed,” Chantelle said.

Statistics released by the Australian Financial Security Authority reveal that personal insolvencies in Australia increased by 17.6% in the quarter ending June 2023.

The young woman admitted she made “bad choices” financially and should have saved money, but she didn’t think she would find herself in this situation because she had a well-paid job.

“I was in good shape. I was in good health. I always worked overtime. Because of those choices when something went wrong, I had no safety net, and it all fell apart so quickly,” Chantelle said.

She encouraged those considering filing for bankruptcy to do what makes them happy or just “do it for the sake of it.”

Statistics released by the Australian Financial Security Authority reveal that personal insolvencies in Australia increased by 17.6% in the quarter ending June 2023.

There were 2,705 new personal insolvencies during this period, compared to 2,301 in June 2022, including 1,569 bankruptcies.

National data shows that personal insolvency cases have increased in all states and territories except South Australia and Western Australia, where the figures have remained stable.