When it comes to
Bankruptcy Darwin, there are a bunch
of options that we get given depending upon who we are, who we speak to, and
exactly what has gone wrong. 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 Darwin, a lot of the facts you receive on this topic will reflect
the interests of the advice giver. Therefore, if you call a debt consolidation
provider, 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 assisting you wrap each
one of your credit card and personal loans into just one neat and tidy bundle.
I hate to tell
you this but they aren't doing it free of charge. Please do not misunderstand
me: if you believe your financial troubles in Darwin may possibly be fixed by
paying less interest, then go ahead and look into the choices. Even a small
amount of interest saved over years easily adds up.
More often than
not 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 already has nonpayments on it so no one 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 a little bit of interest just won't make a great deal of difference,.
- -You've most probably arrived at the stage where you've had enough, you're emotionally worn down, you can't go on yet another day ignoring blocked calls on your phone, ignoring the demands in the mail and so on.
Personal Insolvency Agreements
So when it comes
to Bankruptcy in Darwin, what's the big difference between a Debt Agreement and
a Personal Insolvency Agreement?
Flexibility is
the main thing Personal Insolvency Agreements (PIA) have in their favour.
They're also administered by a registered and - may I add - regulated trustee
featuring the government trustee ITSA, and not a private firm that advertises
on TV. Ultimately this process is similar to Debt Agreements (DA): The trustee
has a meeting with the people you owe money to and they work out a deal in your
place. You can give a lump sum settlement figure or take part in a payment
plan, or maybe you can offer them assets instead of cash. This might sound okay
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
must come to an understanding the deal. If they don't, your plan is rejected or
ought to be renegotiated.
Generally people
you owe money want all their money back plus interest. Sometimes they'll settle
for under 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 in fact settle for.
In most 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 heard of creditors choosing 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 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 Darwin 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 Fresh Start Solutions Darwin on
1300 818 575, or visit our website: freshstartsolutions.com.au/bankruptcy-Darwin
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