Home Articles How one man’s near-bankruptcy created a financial Man Friday

How one man’s near-bankruptcy created a financial Man Friday

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He once ran an advertising agency – planning and buying media space for advertisers – with top-tier clients, many of whom were publicly listed companies.

Then, something snapped.

In the blink of an eye, or so it seemed, he was deep in the red – a $700,000 hole, compounded by greedy growth and “stupid mistakes.”

Christian Oey met with accountants and lawyers, and then some more lawyers and accountants. Most urged him to go bankrupt. One even asked him to bury the $100,000 cash he had in the backyard, and then go bankrupt. But something told him there could be a better way out.

“I had no income, no business, 60 creditors knocking at my door daily, but I did have almost $100k in the bank, and with a week to go before I was forced into bankruptcy, I decided to contact all my creditors one by one, and prove to them my situation, beg for mercy and negotiate a settlement of sorts,” Oey recalled in an interview with Anthill.

Jumping the hoop

Guess what, it worked. He got away paying 10 cents on the dollar, and if you do the math, he had a bit left over from his cash kitty. What’s more, Oey got himself another shot at business – though the idea didn’t quite strike immediately. But when he found no jobs and unsuccessfully tried establishing other businesses, he realised there was a need for a debt negotiation service, where people didn’t have to go bankrupt to get out of their financial crisis.

Thus was born No Bankruptcy, tapping Oey’s own great negotiating skills and a better understanding of finance.

Bankruptcy is a serious threat, and even more in the protracted, and ongoing, economic slump. Last year, there was a nearly 50% jump in small business bankruptcies. According to the Australian Securities & Investments Commission, there were 2,552 insolvencies in the third quarter, up 10% from the previous quarter.

Today, No Bankruptcy helps many Australians escape bankruptcy, and tide over financial crises. Oey says people need knowledge as much as discipline to get out of financial holes. “People usually go and borrow more money to pay borrowed money, which, of course, doesn’t solve the problem,” he says.

Oey considers bankruptcy a legitimate method, but suggests it can be a last resort because there are serious life-long consequences. He offers three tips on prudent financial management that could stop you from ending up as Oey’s client:

1. Stop using the cards. Cut the cards up, stop the bleeding, and don’t go and get more debt. Borrowing money to pay borrowed money only treats the symptoms, not the root cause.

2. Write out a budget. This is basic. Write your household income at the top, then write out your expenses below that. When you see the score, i.e. Income vs expenses, then you will how much trouble you are in. If you are heavily in the red, see what expenses can be trimmed. Cable TV? Car? Eating out?

3. Get a bigger shovel! Get more income. This may mean working one or two or extra jobs, delivering pizza, waiting tables, stacking shelves, whatever it takes to generate income to pay off your debts. Have a garage sale or sell stuff on ebay. Generate as much cash as you can.

For those already deep in debt, Oey finally suggests five tips to get out of debt quicker:

1. Prioritise your outgoings. Make sure you keep food on the table, and a roof over your head, and, of course, keep the lights on. The rest can wait.

2. Keep a $1,000 emergency fund. These are unexpected events such as your tyre blowing out on the freeway, the car breaking down etc., not birthdays and Christmas.

3. List your debts from the smallest to the biggest.

4. Start paying off the smallest. So this means paying extra on the smallest debt first while paying the minimum repayments on the other debts, until the smallest debt is 100% paid out. Then start on the next debt in your list. Rinse and repeat until you are debt free.

5. Upgrade your emergency fund. Revisit your emergency fund. Raise it to cover 3-6 months’ expenses.

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