I am a 36-year-old single woman, earning $65,000 as an admin officer, and I have recently declared bankruptcy. However, one loan could not be erased, as it is a secured loan, and my car (a Mitsubishi ASX worth $8,000) is attached to it. It is a loan for $17,000 at a high interest rate (29% p.a.), and I still have about six years to pay it off (at $350 a fortnight). I have started using the Barefoot tools from your book (Smile, Splurge and so on), but what can I do with this loan?
What a car crash!
You got really bad advice. If you sat down with me at the time you were going bankrupt, I’d have told you to surrender the car to the finance company and then added the shortfall (after they sold the car) onto your bankruptcy. Then I’d have advised you to save up and buy a similar car for cash.
Instead, your repayments are $8,400 a year … on an $8,000 car!
Look, anyone who charges a 29% interest rate on a car loan is a shark– they deserve to be battered and dropped in hot oil, and eaten by a tubby bloke at the footy.
So, if I were in your shoes, I’d ring up AFSA (the Australian Financial Security Authority) and explain there was a mistake on your bankruptcy — you should have surrendered the car. Then explain that you’d like to do it now, and ask how you go about it.