Bankruptcy in Brisbane - Choices, Choice, Choices

When it comes down to Bankruptcy Brisbane, there are a ton of choices that we get given depending on who we are, who we speak with, and what exactly has happened. One of the most common trouble I see with Bankruptcy is when it comes to selecting between Debt Consolidation, Personal Insolvency Agreements, and Bankruptcy itself.

Should I consolidate my debts?

When it comes to Bankruptcy in Brisbane, a lot of the help and advice you receive on this issue will reflect the interests of the advice giver. Therefore, if you call a debt consolidation provider, I can promise you they will tell you to consolidate your debts. The debt consolidation industry is a multi-billion dollar industry making money in one very simple way: charging you a fee for aiding you wrap each of your credit card and personal loans into a single neat and tidy package.

I hate to tell you this but these people aren't going to be doing it free of charge. Please do not misunderstand me: if you feel your financial problems in Brisbane may be fixed by paying less interest, then go on and look into the choices. Even a little amount of interest saved over years rapidly adds up.

More often than not I find if you read this blog you've undoubtedly tried to consolidate your debts already and come to the following realisations like these:

• Your credit rating is not good, and your credit file definitely has defaults on it so not a single person will give you a loan, consolidated or otherwise,.

• By the time you work it all out, you're so far down a hole that saving on a tiny bit of interest just won't make a great deal of difference,.

• You've most probably reached the point where you've had enough, you're mentally burnt out, you can't go on another day ignoring blocked calls on your phone, ignoring the demands in the mail and so forth.

Personal Insolvency Agreements

So when it comes down to Bankruptcy in Brisbane, what's the big difference between a Debt Agreement and a Personal Insolvency Agreement?

Overall flexibility is the main point Personal Insolvency Agreements (PIA) have in their favour. They're also administered by a registered and - may I add - regulated trustee including the government trustee ITSA, and not a private agency that advertises on TV. Essentially this method is similar to Debt Agreements (DA): The trustee holds a meeting with the people you owe money to and these experts arrange a deal in your place. You can offer a lump sum settlement figure or take part in a payment plan, or maybe you can offer them assets instead of cash. This may sound okay when it comes to the issues with Bankruptcy - that is until you realize that one of the problems with PIA's is that 75 % of the people you owe money to will have to agree on the deal. If they don't, your plan is denied or must be renegotiated.

Generally the people you owe money really want all their money back plus interest. Sometimes they'll go for less than the amount you owe them - it's normally a percentage of the debt - but allow me to stress this aspect: because of all the variables involved in the negotiation process to put together a PIA its difficult to put a figure on what the people you owe money to will truly settle for.

In many cases you'll have to pay back 100 % of the debt owed. This is not because your creditors are greedy or have a mean streak, it's because the administrators take 20 % of whatever is agreed upon with the people you owe money to. That applies whether you use a private company for this process or ITSA, the government body setup to administer to these PIAs.

When it comes to Bankruptcy and insolvency I've come across creditors settling for less 80 % on rare occasions, but that usually only occurs with a public company entering into receivership owing huge sums of money (the kind that makes the news). If you are were owed $10million and you know the people who owe you the money have a team of smart lawyers and some very clever structures in place and they offer 5 % of the debt, you might take it and be grateful. Sadly, ordinary punters like you and me in Brisbane aren't going to get that lucky!

If you would like to learn more about what to do, where to turn and what questions to ask about Bankruptcy, then feel free to contact Bankruptcy Experts Brisbane on 1300 795 575, or visit our website: bankruptcyexpertsBrisbane.com.au.