How Carmen Transformed Her Financial Life After Bankruptcy


Seven years ago, Carmen Hegarty was in a financial hole.

She had about $85,000 in car loans, credit cards and other debts – and health issues had forced her out of her job.

“I had credit cards, I had a wage sacrifice vehicle from my job and I was behind on rent,” the 52-year-old from Cairns said.

“I was getting to the stage where I was going to have to become homeless.”

After speaking to a financial adviser, Carmen declared bankruptcy in May 2016.

Since then, she has recovered piece by piece.

She now works as a financial counselor with the Indigenous Consumer Assistance Network (ICAN) in Cairns, helping others in financial difficulty.

For ABC Everyday Money Q&A, we sat down with Carmen to hear her story.

How did you find yourself in a difficult financial situation?

I am a single mother and worked in the federal government for 10 years. I was not well health wise and it started to affect my work. I ended up quitting, and it was a huge disappointment because I loved what I was doing.

I had to go to Centrelink, and that’s where the money issues started. I couldn’t pay the mounting debts and had to ask my family and friends for money.

I ended up moving back in with my mother and a friend recommended that I see a financial advisor. I was about $85,000 in debt and he recommended I file for bankruptcy.

You would have $50 to last until the next payday while all your other debts were paid off, but you never had any wiggle room.

How did you get up?

I trained as a phlebotomist [a health worker who collects blood and other samples for testing]. I did that for about two and a half years. I was working part-time and it wasn’t too stressful, so it helped while I recovered.

A friend of mine worked at ICAN. She told me there was a vacancy for a trainee financial advisor. While you were working, you were training for your degree in financial counseling. This is where I learned a lot about financial literacy.

A colleague of mine has designed a tool called Yarnin’ Money, and it’s being used to teach Aboriginal and Torres Strait Islander people about financial literacy and the intergenerational trauma that we’ve been through.

In one of these workshops, I really understood that my problems with money really came from my childhood, and I realized that I didn’t want to be in this situation anymore.

How has your relationship with money changed?

While I was working on my financial counseling degree, I bought a big tin can. I was spending $17 a day eating breakfast at the cafe near work, so I decided to put that $17 a day in the box and open it when I graduated.

When 2020 came I was in lockdown and didn’t have the usual graduation ceremony.

I also have a savings account that I can’t touch, and I saved to buy a car.

It was used and cost around $9,000, but I had that money because I saved it. I had never done this before. It was very liberating to feel that “I can do this”.

Carmen started saving using a piggy bank. It’s something she’s been doing ever since.(ABC Far North: Brendan Mounter)

What advice would you give to people who find themselves in financial difficulty?

Sometimes, to learn things, you have to hit rock bottom. You can’t give up, you have to keep going. Some people feel there is nothing to gain, they feel trapped.

As a financial advisor, once you start telling people about where you’ve been, that’s when you start hearing their story.

Consulting a financial advisor can help you manage your finances and get rid of your creditors. Then you can handle your other issues without the added weight of creditors chasing you.

I can see the relief on the client’s face – he’s thinking “Oh my god, why didn’t I do this sooner”.

What are your goals now?

If I can live a life like my mother, I will be happy.

I think of the quote: “If I become my mother, or even half the woman she is, I will consider my life an achievement.”

My next adventure is saving up for a 4×4. I also want to buy myself a small caravan.

I’m not interested in buying a house, I want something mobile and small.

I’m not interested in any of the material stuff, just me and my cats and a 4×4 with a small trailer in the back.

This interview has been edited for clarity and conciseness.

You should consider obtaining independent professional advice based on your particular circumstances.

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