Overview

Andrew Starf is a married, full-time sole trader who runs his own food truck business in Melbourne. He has a mortgage on his home (with only $25,000 in equity), has taken out a business loan to pay for his food truck and a personal loan to pay for his car. His wife, Margaret, only works part-time as an aged care worker, assisting the elderly in their day-to-day tasks outside of home.

Andrew’s food truck was booming until Coronavirus hit. Unable to attend festivals and public venues due to lockdown, Andrew had to put his food truck business on hold and resort to working part-time at a takeaway restaurant. His wife was also stood down due to her job becoming redundant and put on JobKeeper.

Their reduced income made it difficult for them to meet their debt repayment obligations, leaving little money left over for everyday expenses.

Unsure where to turn, Andrew contacted us for help. After speaking to one of our debt specialists and going through all available solutions, we determined that Bankruptcy was Andrew’s best option.

Our private Registered Bankruptcy Trustee was able to assist Andrew in the following ways:

  1. Andrew was able to keep his food truck as long as he continued to meet the repayments on the business loan. After a review of the business’ financials, it was clear that there was no realisable value in the business assets after considering the value of the secured loans. It was beneficial to allow Andrew to continue to trade the business to generate income which may be considered when assessing him for potential income contributions.
  2. Andrew was also able to keep his car. As the personal loan taken out for the purchase of the car was unsecured, Andrew was no longer required to pay out this loan as it was wiped upon becoming bankrupt. Instead, Andrew’s wife purchased the trustee’s net interest in the vehicle so the vehicle could be retained. The vehicle was purchased for $11,000 and after the deduction of the applicable threshold, the wife made an offer of $3,000 to purchase the Trustee’s interest in the vehicle payable during the bankruptcy period.
  3. As Andrew’s wife is a co-owner of the house, she purchased the Trustee’s half interest in the house with instalments made during the Bankruptcy period. This has allowed the bankrupt and his wife to continue to live in the home.
  4. Finally, we cleared all of Andrew’s unsecured debts, providing him and his wife with a fresh start.
CreditorDebt BalanceDebt Repayments
Prior to Bankruptcy
HSBC - Credit Card 1$49,210$799 / month
Bankwest - Credit Card 2$21,694$497 / month
Suncorp - Secured Business Loan (Food Truck)$19,427$1,500 / month
NAB - Unsecured Personal Loan$11,142$80 / month
ANZ - Home Loan$500,000$2,100 / month
Total Debt$601,473$4,976 / month
After Declaring Bankruptcy
Suncorp - Secured Business Loan (Food Truck)$19,427$1,500 / month
ANZ - Home Loan$500,000$2,100 / month
Wife Purchase in Vehicle$3,000$80 / month
Wife Purchase in House$12,500$345 / month
New Debt Repayment$534,927$4,025 / month

How We Helped