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Vicki is in her 40’s and has credit card debt of approximately $55,000 that she can’t get on top of despite the fact that she earns good money.

Vicki works as in the IT industry and earns $2,600 a fortnight (after tax).

She lives on her own in a rented property and has a perfect rental history.

Vicki’s only major asset was a two year old Holden SSV Sportswagon.

Vicki told Fred and Steve Appleton in her initial email her car loan was over 7 years and she is repaying $850 a month. She reported that she has $50k remaining on the car and the loan was secured by the Holden itself.

Vicki mentioned she was not behind in payments on the car loan and her preference was to continue to make payments as normal.

Vicki has been dabbling with the idea of going into a Debt Agreement or applying for Bankruptcy for some time, but had always ended up putting it in the ‘too hard’ basket.

Deciding that she needed to finally take an unemotional review of her finances she researched again how the Bankruptcy and Debt Agreements options worked and contacted Fred Appleton’s office via email.

Steve Appleton read Vicki’s email and gave her a call the same afternoon.

Steve and Vicki discussed the pros, cons and costs of going into Bankruptcy and compared that to the pros, cons likely cost of using a Debt Agreement.

Vicki had spoken to two Debt Agreement companies the previous year and so she had a reasonable idea of the cost of a Debt Agreement, her comment to Steve was that she had not proceeded then because of the high cost, she worried she might not really be much better off with a Debt Agreement.

Steve explained to Vicki that if she used the Bankruptcy option then her unsecured debt would be cancelled immediately (from her perspective) and that because she was a higher income earner then she should budget on paying a portion of her fortnightly earnings as a Bankruptcy earnings contributions to her bankruptcy trustee across the period she is Bankrupt.

Vicki has no dependents and Steve explained the protected earnings threshold in that applied to her was approximately $2,106 per fortnight (after tax).
Given Vicki’s fortnightly earnings are $2,600 at the moment then she earns approximately $494 per fortnight over the bankruptcy earnings threshold.

Steve assured Vicki that it was a pretty common situation for medium and even higher income earners to use the bankruptcy system, in other words her situation was not as unusual as she had initially thought.

Steve went on to explain to Vicki that she should expect to contribute about $247 per fortnight (i.e. fifty percent of $494) into her bankrupt estate controlled by her Trustee.

Steve told Vicki she would need to make these contributions regularly, most likely each fortnight just after she is paid.

Steve and Vicki together calculated that the expected cost to Vicki of being bankrupt would be approximately $19,000 which is the sum total of her earnings contributions over three years.

Steve explained that if she was promoted (with a pay rise) or received a performance bonus whilst she was bankrupt then she should expect that her contribution payment to her Bankruptcy would also rise.

Steve commented that if her income dropped back or if she was out of work for a few months then she should expect her income contribution would fall or cease.

Vicki mentioned that the overall cost of Bankruptcy was looking like it would be much lower than the estimates she had received from the Debt Agreement companies she had previously contacted.

Steve made the suggestion that Vicki make contact with a registered Trustee to have a ‘get to know you’ conversation and so that way she could double check the income contribution estimate.

Vicki mentioned she had seen a link to Nicholls & Co on the Appleton website and had also seen the Nicholls & Co website during her general research on Bankruptcy and Debt Agreements on the internet.

Vicki mentioned she had already had a quick read of the Nicholls & Co website and that she planned to place a call to Alan Nicholls the following day during her lunch break.

Vicki requested and received the Fred Appleton bankruptcy questionnaires via email the same day. She completed the questionnaires in just over and hour that evening and returned them as instructed.

Vicki’s Bankruptcy documents were prepared to a professional standard by Helen Millward within two days and ready for her signature.

Whilst her Bankruptcy documents were being prepared she spoke with Alan Nicholls who independently calculated and verified Vicki’s income contribution estimate.

Importantly Alan Nicholls assured Vicki that as Trustee he would have no reason to contact Vicki’s employer which had initially been one of her primary concerns.

Alan Nicholls emphasized that it was her responsibility to make her income contributions on time each fortnight into the Trust account controlled by the Trustee, the employer was not involved. Alan commented ‘your employer will pay you as normal and they would typically not know you were bankrupt unless you told them’.

During their conversation Alan Nicholls also confirmed that Vicki’s car would not be considered an asset in her bankruptcy as it was subject to finance and would be very unlikely to show any positive equity, either now or at any time during the period of her bankruptcy.

As their conversation was drawing to a close Alan Nicholls mentioned to Vicki that if she would like him to act as Trustee then she should post her signed bankruptcy documents to Nicholls & Co marked to his attention and, subject to his review of Vicki’s Statement of Affairs document, he would consent to act as her Bankruptcy Trustee.

Helen Millward completed Vicki Bankruptcy documents within two days and returned them to Vicki.

Vicki then signed and dated the Bankruptcy documents and decided to post them to Alan Nicholls at Nicholls & Co.

After reviewing her ‘Statement of Affairs‘ Alan Nicholls decided to provide consent to act as Vicki’s Bankruptcy Trustee and lodged her Bankruptcy documents with AFSA.

Vicki was pleasantly surprised how straightforward the process was.

She was also pleasantly surprised that Alan Nicholls returned her telephone call and spoke like a normal person and at the same time was both helpful and friendly.

Vicki’s Bankruptcy was accepted by AFSA and was in place about a week and a half after her first conversation with Steve Appleton.

She received a Bankruptcy Notice from AFSA confirming her bankruptcy was accepted a few days later.

Shortly thereafter she received written details from Nicholls & Co (complete with a worksheet) of how to begin making her fortnightly income contributions. Vicki ceased making payments on her problem debt the same week she spoke with Steve Appleton.

As far as Vicki is aware none or her work colleagues, friends or family members know she is Bankrupt and this is the way she intends it to stay.

Vicki takes the pragmatic view her Bankruptcy is the business of her creditors, trustee and AFSA. No one else needs to know because it is none of their business.
Vicki is sleeping well each night and is getting on with her life.

Here is what Vicki said in an email to Steve Appleton a few weeks after first contact.

Hi Steve,

It’s been just under a week now since I filed bankruptcy and I can’t begin to tell you what a relief it has been. I can honestly say that it hasn’t really sunk in until now when all of a sudden all that debt has just vanquished, into thin air.

I have been living with it for so long now that it had become a normal part if life. I guess that’s how they like you to be in the end – trapped.

I’d like to thank you (and Fred of course) for your assistance and for compiling the website with true and correct information.

There are a heck of lot of false truths and traps out there that only scheme to fleece more money out of distressed and vulnerable people who are at the end of their rope like I was.

I hope more people discover your site and attain peace of mind in the same way I have. The funny thing is that I discovered it around two years ago but thought it was either too good to be true or just didn’t want to face up to the mess I’d gotten myself into. I can attest that it isn’t a dream and it is very real.

Thank you.
Vicki, February 2014

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