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.
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