Is bankruptcy the only option?

Pauline and her husband see no way out of their financial mire and are considering bankruptcy. But is this extreme course of action the only answer?

Q. Pauline
My husband and I are in financial difficulty and see bankruptcy as the only option. The trouble is, neither of us want to lose our home, particularly my husband who says “no” each time it’s mentioned. We are both in our 60s and so have no chance of buying again. We still owe heaps on our house, but if it was sold, we would have enough equity to pay our creditors. However, we would be left with very little money, if any.

My husband is self-employed, but has been subcontracting for the last 13 or 14 years to the same firm, who have suddenly, without any warning, started to give my husband, just two days of work a week. Due to ill health, I am on a Disability Support Pension and I am at the end of my tether. I just don’t know which way to go. I should mention that my husband will be 65 next year.

I would be eternally grateful if someone could let me know what I could do or give me any advice whatsoever.

A. Pauline, given the financial nature of your question we are not able to give advice on what you should do; however, we can point you in the direction of those who may be able to help. Bankruptcy is an extreme course of action and can have an impact on every facet of your life – this is not something to be entered lightly.

You do not say if you have had financial counselling or have sought any other solutions to your debt problems. Nor do you say if you are receiving demands for payment of your debts.

Firstly, you should consult a financial counsellor. Financial Counselling Australia offers a free service and one of its fully-trained counsellors can help you to understand your options and how to contact and negotiate with your creditors. A financial counsellor will ask you to provide a complete breakdown of your liabilities, assets and income. Be honest. They can’t help you if they don’t have the full picture. While this may be difficult for your husband to deal with, it really is the best chance you have of being able to save your home. To find out more about how a financial counsellor may be able to assist, visit

Next, through Centrelink you can also gain access to a Financial Information Services Officer (FISO). While a FISO is unable to give actual financial advice, they can give you access to information about benefits and services available to you. To make an appointment with a FISO, call 12 2300. offers useful factsheets on how to deal with debt problems. These cover creditors’ notices, bankruptcy and mortgage defaults and can provide you with information about how you can work to resolve your issues. To access these factsheets, visit

And, lastly, it’s important to deal with your debt problems before they get any worse. I understand your husband may be reluctant to admit to the issues you have, but it’s important that you deal with these together. However, if you can’t get him to discuss this with you, you should make provisions to deal with this yourself.

Related articles:
Is debt ruining your retirement?
Clearing debt on a limited income

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