When it comes
down to Bankruptcy Sunshine Coast,
there are a lot of choices that we get given depending on who we are, who we
speak to, and exactly what has gone wrong. The most common confusion 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 Sunshine Coast, a lot of the info you receive on this issue will
reflect the interests of the advice giver. Therefore, if you call a debt
consolidation firm, I can guarantee you they will tell you to consolidate your
debts. The debt consolidation industry is a multi-billion dollar industry
making money in one very basic way: charging you a fee for aiding you wrap all
of your credit card and personal loans into just one neat and tidy bundle.
I hate to tell
you this but they aren't going to be doing it for free. Please don't
misunderstand me: if you consider your financial issues in Sunshine Coast can
be solved by paying less interest, then go on and look into the options. Even a
small amount of interest saved over years rapidly adds up.
Usually I find
if you read this blog you've undoubtedly attempted to consolidate your debts
already and come to the following realisations similar to these:
- Your credit rating is not good, and your credit file already has nonpayments on it so not a single person will offer you a loan, consolidated or otherwise,.
- By the time you work all of it out, you're so far down a hole that saving a small amount of interest just won't make a lot of difference,.
- You've very likely gotten to the point where you've had more than enough, you're mentally worn down, you can't go on another day ignoring blocked calls on your phone, ignoring the demands in the mail etc.
Personal Insolvency Agreements
So when it comes
down to Bankruptcy in Sunshine Coast, what's the difference between a Debt
Agreement and a Personal Insolvency Agreement?
Freedom is the
main point Personal Insolvency Agreements (PIA) have in their favour. They're
also administered by a registered and - might I add - regulated trustee
including the government trustee ITSA, and not a private organization that
advertises on TV. Ultimately this method is similar to Debt Agreements (DA):
The trustee has a meeting with the people you owe money to and these experts
mediate a deal in your place. You can give a lump sum settlement figure or take
part in a payment plan, or perhaps you can offer them assets as an alternative
to cash. This might sound acceptable when it comes to the problems with Bankruptcy
- that is up until you realize that one of the problems with PIA's is that 75 %
of the people you owe money to have to agree on the deal. If they do not, your
proposal is denied or has to be renegotiated.
Generally people
you owe money really want all their money back and also interest. Sometimes
they'll opt for less than the amount you owe them - it's normally a percentage
of the debt - but allow me to stress this part: 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 in fact settle for.
Most of the time
you'll have to pay back 100 % of the debt owed. This is not just because your
creditors are greedy or have a mean streak, it's because the administrators
take 20 % of whatever is decideded 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 heard of creditors choosing less 80 % on rare
occasions, but that usually only occurs with a public company going 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 wise lawyers and some very clever frameworks in place and they offer 5
% of the debt, you might take it and be grateful. Sadly, ordinary punters like
you and me in Sunshine Coast 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 get in touch with Fresh Start Solutions
Sunshine Coast on 1300 818 575, or visit our website:freshstartsolutions.com.au/bankruptcy-Sunshine
Coast
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