When it comes
down to Bankruptcy Townsville, there
are a lot of choices that we get given depending on who we are, who we speak
to, and exactly what has happened. One of the most common trouble I see with Bankruptcy
is when it comes to choosing between Debt Consolidation, Personal Insolvency
Agreements, and Bankruptcy itself.
Should I consolidate my debts?
When it comes to
Bankruptcy in Townsville, much of the facts you receive on this subject matter
will reflect the interests of the advice giver. That is why, if you call a debt
consolidation company, I can guarantee you they will tell you to consolidate
your debts. The debt consolidation operation is a multi-billion dollar industry
making money in one very straightforward 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 they aren't going to be doing it for free. Please don't
misunderstand me: if you feel your financial problems in Townsville can be
solved by paying less interest, then go ahead and investigate the options. Even
a tiny amount of interest saved over years quickly adds up.
Normally I find
if you are reading this blog you've undoubtedly tried to consolidate your debts
already and come to the following realisations like these:
- Your credit rating is no good, and your credit file already has nonpayments on it so nobody 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 simply won't make a great deal of difference,.
- You've probably gotten to the point where you've had enough, you're emotionally worn down, you can't go on one more day ignoring blocked calls on your phone, ignoring the demands in the mail etc.
Personal Insolvency Agreements
So when it
concerns Bankruptcy in Townsville, what's the huge 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 featuring the government trustee ITSA, and not a private firm
that advertises on TV. Basically this process resembles Debt Agreements (DA):
The trustee has a meeting with the people you owe money to and these experts
negotiate a deal in your place. You can offer a lump sum settlement figure or
take part in a payment plan, or you can offer them assets instead of cash. This
can sound okay when it comes to the complications 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 need to agree on the deal. If they don't, your
plan is denied or will need to be renegotiated.
Generally people
you owe money want all their money back as well as interest. Sometimes they'll
settle for beneath the amount you owe them - it's generally a percentage of the
debt - but let me 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 most cases
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 come across creditors settling for 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 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 Townsville 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 Experts Townsville on 1300 795
575, or visit our website:bankruptcyexpertsTownsville.com.au.
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