Bankruptcy can have long-term adverse consequences on employment options, borrowing capacity and even rental prospects. Bankruptcy should be an option of last resort for debtors who have had the opportunity to carefully consider their legal and financial options. The legal assistance provided by JusticeNet’s Self-Representation Service can make all the difference for debtors such as Samantha*, who struggle to cope with the pace and complexity of formal bankruptcy proceedings in the Federal Courts.
Samantha contacted JusticeNet’s Federal Courts Self-Representation Service (FCSRS) after being served with a creditors’ petition. She was at a loss with what to do. Through tears Samantha explained that her financial position had deteriorated several years prior when her marriage ended abruptly and she was left as the sole carer of her two children. To make ends meet, she had increasingly relied on credit cards and high interest loans.
Samantha had considered selling her house to pay off her debts but needed time to put it on the market. The FCSRS assisted her to make offers of settlement to the creditor, but the creditor refused to entertain any offers and seemed determined to make her bankrupt. With the assistance of volunteer lawyers, the FCSRS then helped Samantha to seek several adjournments of the court proceedings to allow for an orderly sale of her house. The FCSRS helped Samantha prepare detailed affidavits setting out the concrete steps that Samantha was taking to sell the house.
The FCSRS kept in close communication with Samantha throughout her proceedings, and prepared her for the very real possibility that the Court would dismiss her applications and declare her bankrupt. The Court routinely advises self-represented debtors that it is not a “debt collection service”, and in the experience of the FCSRS, where a debtor meets the preconditions for a sequestration order, the Court is unlikely to adjourn a creditors’ petition for longer than a few weeks.
The process was highly stressful and traumatic for Samantha. At one point, she disclosed to FCSRS staff that the prospect of bankruptcy had triggered suicidal thoughts. In despair, Samantha had written goodbye letters to her family. (Fortunately, JusticeNet staff have had training in how to deal with clients at risk of self-harm and suicide. FCSRS staff spoke with Samantha at length and referred her to appropriate mental health services.)
Ultimately, with the help of the FCSRS, Samantha obtained several adjournments. This allowed her to find a buyer who agreed to a reasonable price and a short settlement period. The sale proceeded, Samantha was able to meet all of her debts and the creditor’s petition was dismissed.
This is what Samantha had to say in her own words “The outcome could not have been better and I certainly know that without your time, professionalism and kindness this result would never have happened. I believe you went way beyond the call of duty! I’ve sold my house…moved into a new rental and feel totally blessed. I may not have any money…but I have my freedom….in essence you saved my life.”
If you feel that you are experiencing a crisis please contact Lifeline 24 Hour Crisis Support on 13 11 14 or Suicide Call Back Service (available 24/7) on 1300 659 467.