I was reading the thread a couple of days ago about financial hardship and there was some excellent advice given on how to, proverbially speaking, give the middle finger to the banks.I have a friend and we were going over his accounts after I explained how I read that thread on hotcopper. I was wondering if anyone has any ideas on this situation:
Situation: 80k in debt (22k secured against the car but the car is worth 5k. The rest of it is personal loans 46k (15% interest rate) and credit cards the residual (13% i/r on purchases). Nonetheless my friend does not have any collateral (shares, property, assets etc) so the banks will not restructure the debt and package it together. Basically my friend is paying tens of thousands in interest a year on this debt and the principal payments hardly get scratched.. its such a disgrace and I am passionate about helping him out.
He said that he went to the banks/ car financing under financial hardship and they gave him 3 months grace but wont do anything else. He is at the point at not even caring about whether they take away the car because it is costing too much in interest payments and servicing and the car is worth nothing. He is worried about the implications of going into bankruptcy as well but I said imagine the money you would save and be able to save. He said that his brother went into bankruptcy 15 years ago and it took the banks 10 years to give him a loan so he is worried about that as well. I also have heard that if you go into bankruptcy, the debt isnt entirely written off and instead is merely restructured. Together him and his wife earn less than 50k.
