Riches to Rags .H ow to go Broke successfully

Published: 25th February 2011
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Bankruptcy or BUST

Article by Cathy Jayne Pearce

The Pros of Bankruptcy

I have also written a further article on The Cons of bankruptcy

Have you been going through difficult financial times ? The economic climate is certainly seeing a lot more people go through bad financial circumstances and you may have considered bankruptcy .

For those of you who do not know my story, then I shall briefly recollect my past. The name Cathy Jayne Pearce -- my name -- was once associated with creating beautiful spaces. My business, Cathy Jayne Developments, took old and worn-out properties, renovated them, and gave them a new lease on life. I was once proclaimed as "Taking Adelaide by Storm" and as "seeing a city full of opportunities" as I renovated units, houses, and pubs, making substantial profits.

As a lucrative property investor, I worked some 60 to 80 hours a week, wrote for Wealth Creator Magazine, had a regular column in the Advertiser’s Home Buyers Guide, and was listed in Business Review Weekly’s Rich List with a fortune of $19 million. My husband, Myles, and I were also noted as being Adelaide’s ‘Glam Couple’ of Australia’s ‘Very Rich.’ We rubbed elbows with Adelaide’s A-list celebrities, and we were considered as ‘Hot Gossip’ for all the right reasons. We had it all .. the Mansion , investment properties , holiday house, designer clothes , the nanny , the housekeeper and even a cook tendered to our every needs .

I began building my property empire at the age of 23, and I watched it all begin to slip away in 2006 when the sale of my prized historical mansion, The Myrtles, went horribly wrong. Today, in 2010, I am insolvent, financially embarrassed, and I declared myself bankrupt in 2009 after years of avoiding it . So why did I attempt to avoid bankruptcy ? . For many reasons but the main one being the stigma I thought was attached to it ( amongst other things that are discussed on my website )

Filing for bankruptcy might seem like an exhausting and embarrassing ordeal, but in reality there are many benefits to this situation. Instead of continuing to feel overwhelmed with the burden of debt, you can begin again. You have a chance to greatly improve your life in some very surprising ways. Here are a few benefits to bankruptcy that you might not have expected ….

Personally for me I found Bankruptcy a huge relief . Here is why …

Be prepared

In my book Riches to Rags – How to go Broke successfully I discuss ways to prepare yourself for Bankruptcy . But be careful there are rules that you will discover only once you are bankrupt . ITSA ( Insolvency Trustee that governs the law of the Bankruptcy act ) don’t take to kindly to people who off load any assets and avoid creditors . But done the right way it can be a lot less painful being Bankrupt

No More Hiding-

Once you come to terms with your situation and file for bankruptcy, you won't have to worry about being hunted down by debt collectors. This can provide a huge relief for most people. The constant pressure of checking your phone, or that dreaded feeling when you reach for your mail, will melt away. Debt collectors can often leave people feeling borderline harassed, with incessant attempts to contact. Living under that kind of stress leaves people feeling debilitated. One benefit to bankruptcy is that the harassing finally stops.

In my book Riches to Rags – How to go Broke successfully I discuss strategies with how to successfully avoid debt collectors while you decided if bankruptcy is for you .

You Can Get Help-

You will be able to put together a game plan. Chances are, there might be lighter at the end of your tunnel than you bargained for. Filing for bankruptcy is not something that is lightly suggested. If your solicitor is recommending that you file, then there is probably a very good reason. So, stay strong and find out what comes next. Consider talking to more than just a solicitor in order to get a better over-all understanding of your situation. There are always different perspectives and it may benefit to hear more than one. Learn everything you can about Bankruptcy . There are a lot of recourses out there !

Set Free-

It might be overwhelming to think of losing your house, car, and or other things, but holding on to those things would only continue to damage your credit record. And cause stress . Think of the benefits of not having to worry about the maintenance on both a car and a home. So much money is poured into keeping our cars running and our homes in working order, with those things no longer hanging over your head, you are free from those sources of worry. Renting rather than owning is not such a bad thing and you can still own a car . In fact this is the first car I have actually owned that isn’t owned by the bank . Now that has to be a relief in itself ! But it need not be like that either Bankruptcy can actually save houses , as well as cars . If you can service them they may be opportunity to keep them .

Fresh Start-

Filing for bankruptcy gives you a chance to begin again. You can start by repairing your credit, slowly—but deliberately. You can also consider this fresh start as a time to refocus and really come to understand what it is you want. Sometimes by losing, we find what it is we truly need. This time of life can be a very emotional, but healing phase. Bankruptcy can certainly save Lives

Credit Card –

You might be feeling discouraged when all those enticing credit card offers come pouring in through the mail and you seem to be having the hardest time getting approved at all, but this is a blessing. By not being able to obtain all of those unnecessary credit cards, you are learning how to better manage your finances. This is one of the many great benefits of bankruptcy. Now days you can organize a debit card anyway which means you have to have the money before you spend it !

Wipes debts off

After you have served your period of bankruptcy all of your debts have been wiped of and you are discharged ( the time period varies in different states and continents )

New Loans-

Eventually over time you will become eligible for a new loan. This is exciting, because that means you are not branded for life from bankruptcy. In the mean time, you can dream, plan, and better manage your money, so that when that day comes—you will be more than ready. Perhaps you were meant to walk down that road, to discover the benefits of bankruptcy. Learning how to manage your money well is a lesson that will aid you, for the rest of your life.

No more Court Appearances

If the situation has got so bad that creditors are taking you to court once you have declared bankruptcy Creditors can not keep pursuing you in court ( except in criminal matters of course )

In my book Riches to Rags – How to go Broke successfully I share my ordeal and experience with you . I had 11 court cases during 2008 and 2009 before I declared Bankruptcy and could have saved myself a lot of stress .

Build Savings-

Now that you are out from under that overwhelming burden of debt, consider the areas of your life that you want to save. Now is your chance to start saving for college, the new car, or even retirement. The possibilities are endless. You might consider coming up with a more stable plan for saving, but cutting back on your unnecessary spending and trying to pay for things in cash as often as possible. This will only further help you along as you build up your savings. Now that you have experienced a loss in some ways, you will most likely have a greater sense of appreciation for the things that you now have in life—like your savings. If you had never experienced the effects of bankruptcy, you may have never fully understood its benefits.

You Can Still Earn money

In Australia , and because I have Children – I can still earn $50,000 per year ( check what you can earn ) and any amount over that I share with the Trustees and creditors 50 / 50 . So I can Earn as Much as I want

Life Still Continues ..

There are ways and means to continue living during bankruptcy . I discuss these in my book Riches to Rags . How to go Broke successfully !. Access to superannuation , trust funds , and employee relationships are all things that can be employed . You can still live a good life and I will be writing some further articles of " Budgeting is the new black " ( written by a bankrupt ) and clever ways to have a champagne lifestyle on a beer budget . If I can you can …. With permission from your trustee you can still go overseas and live pretty much as normal !

Riches to Rags . How to go Broke Successully

The Global Financial Crisis and the high rate of foreclosures, job loses, and economic downturn, has placed increasing pressure on many households financially.

Thus, From Riches to Rags is being written in order to offer others who are dealing with the possibility of bankruptcy, ways of resolving the issues that they encounter. Overall, this book allows the reader to understand that they are not alone in their battle, and that losing your wealth can happen to anyone, no matter how big, or small, their bank balance, or asset accumulation is.

Riches to Rags recounts events as they actually happened. The book takes a long, hard look at my life in its "heyday" and tells of how my fortune and popularity came to a crashing halt.

You Can Still make it again !

Plenty of people who have gone bankrupt go on to make it again …

It is about understanding insolvency and how to deal with financial embarrassment. And, it is about where you can find help when you have hit rock bottom and how to pick-up the pieces and hold your head high so that you can move forth in life. So many people lose their battle with insolvency because they lose their friends, are not able to find employment, and they can no longer live with their shame. Instead, they end their pain and take their own lives so that they no longer have to suffer.

From Riches to Rags has been written in the hopes that it will offer others, who are dealing with bankruptcy, ways of resolving the issues they encounter.

• Seek Independent advice before considering filing for bankruptcy

• I have written a separate article on the Cons of Bankrupcty that can be viewed on my website

Article Author Bio

Cathy Jayne Pearce owned more than 30 companies in Australia, was listed on BRW’s rich list with a wealth of $19 million, and was considered as the South Australian property princess during the 1990’s, as she redeveloped hundreds of run-down units and gave them a new lease on life. Today, Cathy’s businesses are insolvent and Cathy has been declared bankrupt, however, Cathy considers her first-hand knowledge of business and its collapse as one of her greatest assets. Cathy Jayne Pearce is the author of ‘From Riches to Rags’, an autobiographical account of her journey from riches to rags, which offers hints, tips, and advice on everything life has thrown at her. For more information on Cathy, or her book, please visit:


Cathy Jayne Pearce

Author of From Riches to Rags: How to Go Broke Successfully

PO Box 2053, Glenelg, S.A. 5045

Phone: 0415 805 626

Email ; or

Skype ; cathyjaynepearce


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