When it comes to
Bankruptcy Shepparton, there are a
load of choices that we get given depending on who we are, who we approach, and
what exactly has happened. Among 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 Shepparton, a lot of the information you receive on this issue
will reflect the interests of the advice giver. That is why, if you call a debt
consolidation firm, I can assure you they will tell you to consolidate your
debts. The debt consolidation industry is a multi-billion dollar industry
making money in one very straightforward way: charging you a fee for aiding you
wrap all of your credit card and personal loans into just one neat and tidy
package.
I hate to tell
you this but they aren't going to be doing it free of charge. Please do not
misunderstand me: if you believe your financial troubles in Shepparton can be
fixed by paying less interest, then go ahead and look into the possibilities.
Even a tiny amount of interest saved over years quickly 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 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 all of it out, you're so far down a hole that saving on a bit of interest simply won't make a great deal of difference,.
- You've undoubtedly reached the stage where you've had enough, you're emotionally fatigued, 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
to Bankruptcy in Shepparton, what's the difference between a Debt Agreement and
a Personal Insolvency Agreement?
Adaptability is
the main thing 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 company that
advertises on TV. Basically this method is similar to Debt Agreements (DA): The
trustee holds a meeting with the people you owe money to and these experts work
out a deal on your behalf. You can offer a lump sum settlement figure or take
part in a payment plan, or maybe you can offer them assets as an alternative to
cash. This may sound acceptable when it comes to the issues with Bankruptcy -
that is up until you discover that one of the difficulties with PIA's is that
75 % of the people you owe money to will need to agree on the deal. If they do
not, your proposal is denied or will need to be renegotiated.
Generally people
you owe money want all their money back plus interest. Sometimes they'll go for
under the amount you owe them - it's generally 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 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 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 clever 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 Shepparton aren't going to get that lucky!
If you want 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 Bankruptcy Advice Shepparton on 1300 879
867, or visit our website: bankruptcyexpertsshepparton.com.au
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