Payday Loans For Bankrupts – Accessing Credit In Bankruptcy

Payday loans for bankrupts means accessing credit while in bankruptcy. If you aren’t sure what bankruptcy involves, or how it will impact your ability to access credit, Monzi is here to walk you through it. Please note, this article contains purely informational content, and in no way reflects the service we may offer.

Monzi is a lender-finding service. We do not offer financial advice. Consider seeking independent legal, financial, taxation or other advice to check how the information and ideas presented on this website relate to your unique circumstances.

Woman looking at dawn thinking about payday loans for bankrupts

What are payday loans for bankrupts?

Payday loans include small unsecured loans, usually up to $2,000, offered by payday lenders. Moreover, these loans carry with them a short repayment term and may range anywhere from a few weeks to several months. This, however, may vary between lenders.

Finally, these loans are potentially available to consumers in bankruptcy.

What is bankruptcy?

If you are in debt, and you are unable to repay said debt, you may have the option of applying for bankruptcy.

In short, bankruptcy is the process by which a consumer is declared unable to meet their debts. Under bankruptcy, the consumer is released from most of their debts as well as any contact from debt collectors.

People with unmanageable debt file for bankruptcy through the Australian Financial Security Authority (AFSA).

Bankruptcy is approved by AFSA. If your bankruptcy claim is approved, AFSA will inform your creditors, and provide both them and you with written confirmation. If, however, AFSA declines your bankruptcy, you will be notified in writing and given the reason why.

Am I eligible for bankruptcy?

Declaring bankruptcy is an enormous decision that not only affects your ability to access credit but also has consequences in other parts of your life.

According to AFSA, you must first meet two criteria to be eligible:

  • You’re unable to pay your debts when they are due.
  • You are currently living in Australia or have residential or business connections to Australia.

Finally, note that becoming bankrupt will affect many aspects of your life. For example, during bankruptcy, you are unable to leave Australia without written permission from your trustee. Travelling overseas without permission may result in:

  • Extension of your bankruptcy for another 5 years from your return date.
  • A potential jail term.

What happens to my assets during bankruptcy?

During bankruptcy, you will be appointed a trustee to look after your affairs. Furthermore, your trustee may be able to seize and sell some of your assets. As a result, the trustee can use the proceeds to repay some of the money you owe.

Here’s a run-down of what your trustee may or may not be able to claim:

  • Vehicle. Consumers are able to keep the primary vehicle(s) they use for transport. If, however, your vehicle exceeds a certain value, the trustee may be able to claim it.
  • House. Upon entering bankruptcy, your trustee becomes the owner of your share of the property you own. Therefore, they may sell your property to cover part of your debts. For more information, consider AFSA’s website, and seek financial advice.
  • Money. Certain types of money you earn under bankruptcy are protected, while other forms aren’t. For example, if you with the lottery under bankruptcy, your trustee can seize the winnings.
  • Tools. If you work in a profession that requires the use of tools, you are legally allowed to keep them as long as they are valued under a certain amount.
  • Household contents. Generally, you are free to keep most of your ordinary items of reasonable value.

Keep in mind, bankruptcy may affect your assets. As a result, your ability to apply for payday loans for bankrupts may also be affected.

When does my bankruptcy end?

Bankruptcy generally ends 3 years and 1 day from the day you enter into it. Moreover, being discharged is automatic.

In addition, credit reporting agencies will keep a record of your bankruptcy for:

  • 5 years from the date you entered bankruptcy; or
  • 2 years from when you’re discharged, whichever is later.

National Personal Insolvency Index (NPII)

The NPII is a public record of personal insolvency within Australia. Moreover, if you declare bankruptcy, your name will remain on the index forever.

The register lists your information, including:

  • Name, address, job and date of birth.
  • Any past aliases or past names.
  • The AFSA administration number, start date and type of proceedings.
  • Details of the trustee appointed to administer proceedings.
  • Status of the bankruptcy (currently in, or discharged).

Finally, while your details will remain on the NPII forever, your listing will be updated to show you have been discharged. Therefore, you may not need to apply for payday loans for bankrupts in the future; however, your name will still be listed on the NPII.

What is a Part IX (9) debt agreement?

Consumers who feel they are unable to repay all of their debts may have the option of applying for a debt agreement. Entering into a debt agreement is not the same as bankruptcy. This is because your debts are not wiped. Instead, creditors accept an amount of money the consumer is able to afford, repaid over a period of time.

After you have settled the reduced amount, your credit provider cannot recover the rest of the money you owe.

Secured personal loan while under debt agreement

If you are currently under a Part IX debt agreement and looking for a personal loan, you may feel your options are limited.

Despite this, there may be lenders online willing to consider your application. Moreover, attaching an asset as security to an application over $2,100 may strengthen your chances of approval.

Attaching one of your assets as security against the application acts almost as a guarantee you will pay your loan back according to the contract. Specifically, lenders are legally able to repossess and sell your asset if you fail to repay your loan and recover some of their losses.

Lenders are generally able to accept high-value assets as security. Often, but not always, this can be one of the borrower’s vehicles: a car, motorbike, caravan, boat etc.

What is a personal insolvency agreement (PIA)

A personal insolvency agreement, also known as a Part X (10), is a legal agreement between you and your creditors. In particular, upon entering a PIA, a trustee will be appointed to:

  • Take control of your property and make an offer to the creditor(s).
  • This offer may be designed to pay part or all of your debts either by lump sum or instalments.

Does bankruptcy affect my ability to take out credit?

Yes! Declaring bankruptcy will affect your ability to get credit. Moreover, a bankruptcy listing will remain on your credit report from 2 years after it ends, or 5 years from the date you became bankrupt.

In short, bankruptcy can, amongst other things, dramatically affect your ability to access credit from traditional lenders.

Outside of finance, bankruptcy can have serious effects in your day-to-day life. For example, you cannot travel overseas while bankrupt without permission from your trustee.

Where can I find payday loans for bankrupts?

Certain payday lenders may be able to offer credit to consumers in bankruptcy. Moreover, you may be able to find these lenders online.

The below search terms may bring up results for lenders able to offer loans for bankrupts Australia.

Payday loans for bankruptsCar loans for discharged bankrupts
Personal loans with Part 9Best loans for discharged bankrupts
Personal loans while under debt agreementLoans for bankrupts Australia

The above table may not reflect the loans you’re eligible to apply for.

Speak to a financial counsellor

If you are currently in bankruptcy, a debt agreement or personal insolvency, and need financial advice, you call the Financial Counsellors hotline on 1800 007 007 for free from anywhere in Australia.

Applying for credit, especially while in bankruptcy, is an important decision to make. As a result, it may be a good idea to seek advice from a financial counsellor.

Are there home loans for bankrupts Australia?

If you are a discharged bankrupt, certain lenders may be able to offer you a home loan. Keep in mind, however, bankruptcy is a rather large black mark against your name. Moreover, bankruptcy may have a large impact on your ability to access a loan.

Keep in mind, even if the bankruptcy listing has left your credit file, home loan lenders will still be able to see your bankruptcy history, through the NPII. Moreover, the NPII lists your name forever.

Finally, consumers should consider getting in contact with a professional financial counsellor. Independent advisors can provide information about a home loan or payday loans for bankrupts, and how this relates to your personal situation.

Can I get payday loans for bankrupts online?

Depending on the lender, you may be approved if you are discharged or currently bankrupt. At the end of the day, however, approval will be contingent on:

  • The lender’s criteria.
  • Your personal situation.
  • The type of loan you apply for.

Before applying for payday loans for bankrupts

Applying for loans for bankrupts is not like applying for normal payday loans. As a result, there are extra things to take into account before you apply.

  • Bankruptcy affects both your income and assets. Therefore, your ability to afford repayments may change.
  • As your finances may already be precarious, consider what other options are available to you.
  • Speak to a financial counsellor before applying for credit under bankruptcy or debt agreements. Call 1800 007 007 for free and impartial financial advice.

How much can I apply for with payday loans for bankrupts?

Depending on the lender, you may be able to apply for payday loans from $150 to $2,000. However, certain lenders may be able to offer payday loans up to $5,000.

In addition, the terms may be anywhere from a few weeks to months.

Finally, government regulation caps the cost of loans of $2,000 and less. Specifically, lenders can charge a maximum of a 20% establishment fee and a 4% monthly fee. Despite this, lenders may be able to charge less.

What are the best loans for discharged bankrupts?

The best loan will be dependent on the consumer’s personal situation, as well as the loan they are looking for.

In other words, consumers need to weigh up what they can afford, as well as take into account what loan they’re after. In other words, your options will vary depending on what loan you’re applying for.

The list below includes some examples of loans:

  • Personal loans for discharged bankrupts Australia
  • Cash loans for bankrupts Australia
  • Mortgage for discharged bankrupts
  • Credit cards for discharged bankrupts
  • Car loans for bankrupts

How do I repay payday loans for bankrupts?

If a lender approves you for a payday loan, a direct debit is set up from your account. Therefore, lenders deduct repayments on an agreed-upon frequency.

It may be worth considering lining your direct debit date up with your normal pay schedule.

Finally, keep in mind that a short repayment term may result in more expensive regular repayments, while a longer repayment term will result in more monthly fees.

Monzi Loans

Monzi does not offer payday loans. Instead, we are a lender-finder service that aims to match consumers with potential lenders that may be able to offer personal loans. Specifically, our network of lenders might be able to offer loans from $300 to $10,000.

Approval is always at the discretion of the individual lenders within our network. Therefore, if the consumer is bankrupt and applies with Monzi, we have no way of confirming whether or not you will be approved.

Finally, be aware it can be expensive to borrow small amounts of money. Moreover, borrowing may not solve your problems in the long run.

If you need advice on how to manage bills and debts, call 1800 007 007. Free and independent financial counsellors can be called from anywhere in Australia.

Are you considering a loan to cover your utility bills? You may be able to work out a payment plan with your provider. You can find out more here.

Can Monzi find me payday loans?

Monzi may not be able to find you payday loans. Instead, we do our best to pair you with a lender offering personal loans. These personal loans may range anywhere from $300 to $10,000.

To apply, simply lodge one application on our site. From there, our system will try and pair you with a lender. Apply during normal business hours and you may have a response within 60 minutes.

Keep in mind, you are not guaranteed approval.

Our network of lenders may offer the following:

Small personal loans

  • $300 to $2,000
  • 12 month repayment term
  • Unsecured

Medium personal loans

  • $2,100 to $4,600
  • 13 to 24 month repayment term
  • Secured

Large personal loans

  • $5,000 to $10,000
  • 13 to 24 month repayment term
  • Secured

Your credit provider decides the repayment terms. The terms you’re offered may be different to what is presented above.

Factor In

Costs

Two credit cards
Two credit cards

You won't use a penny to apply for our lender-finding service, but here's some costs you could expect from a lender

Loan amount

$300 - $2,000

Terms

12 months

Costs

20% upfront establishment fee

+ 4% monthly fee

Example

Loan Amount of $1,000 over 6 months repayable weekly (25 weekly repayments). $1,000 (Principal Amount) + $200 (20% Establishment Fee) + $240 (fees based on 4% per month over 25 weeks) = $1,440 total repayable in 25 weekly installments of $57.60.

Under the current legislation, most small personal loan providers don’t charge an annual interest rate (you’ll know this as an APR) %. The maximum you will be charged is a flat 20% Establishment Fee and a flat 4% Monthly Fee. The maximum comparison rate on loans between $300 and $2000 is 199.43%. This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate

Loan amount

$2,001 - $4,600

Terms

13 months

24 months

Costs

48% annual percantage rate

67.41% comparison rate p.a.

Example

Loan Amount of $3,000 over 18 months repayable weekly (78 weekly repayments). $3,000 (Principle Amount) + $400 (Establishment Fee) + $1,379.06 (reducing interest) = $4,779.06 total repayable over 18 months with weekly installments of $61.27.

The Interest Rate for Secured Medium Loans is 48%. The Typical Comparison Rate is 67.41% p.a. WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate with the lender that finances your loan. Click here to see a worked example.

Loan amount

$5,000 - $10,000

Terms

13 months

24 months

Costs

21.24% annual percantage rate

48% comparison rate p.a.

Example

Loan Amount of $10,000 over 24 months repayable weekly (104 weekly repayments). $10,000 (Principle Amount) + $5,577.12 (Interest) = $15,577.12 total repayable over 24 months with weekly installments of $149.78.

The Interest Rate for Secured Large Amount Loans is 48%. Maximum Comparison Rate is 48% p.a. WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate with the lender that finances your loan. Click here to see a worked example.