When it comes to
Bankruptcy Gold Coast, there are a bunch of choices
that we get given depending on who we are, who we speak with, and exactly what
has gone wrong. One of the most common confusion 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 Gold Coast, most of the information you receive on this matter
will reflect the interests of the advice giver. Therefore, if you call a debt
consolidation company, I can assure 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 assisting
you wrap most of your credit card and personal loans into a single neat and
tidy bundle.
I hate to tell
you this but they aren't going to be doing it free of charge. Please don't
misunderstand me: if you think your financial problems in Gold Coast can be
fixed by paying less interest, then go ahead and look into the possibilities.
Even a small amount of interest saved over years rapidly adds up.
Typically I find
if you read this blog you've most likely attempted to consolidate your debts
already and come to the following realisations such as these:
- Your credit rating is not good, and your credit file definitely has nonpayments on it so nobody 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 lot of difference,.
- You've quite possibly gotten to the stage where you've had more than enough, you're mentally 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
relates to Bankruptcy in Gold 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
featuring the government trustee ITSA, and not a private company that
advertises on TV. Basically this process resembles Debt Agreements (DA): The
trustee holds a meeting with the people you owe money to and these experts work
out a deal in your place. You can offer a lump sum settlement figure or take
part in a payment plan, or perhaps you can offer them assets rather than cash.
This can sound alright when it comes to the complications with Bankruptcy -
that is until you discover that one of the difficulties with PIA's is that 75 %
of the people you owe money to have to agree on the deal. If they don't, your
proposal is denied or needs to be renegotiated.
Generally the
people you owe money really want all their money back and also interest.
Sometimes they'll settle for under the amount you owe them - it's typically a
percentage of the debt - but let me 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 actually
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 come across creditors going 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 Gold Coast aren't going to get that lucky!
If you want to
find out more about what to do, where to turn and what questions to ask about Bankruptcy,
then feel free to contact Fresh Start Solutions Gold Coast on 1300 818 575, or
visit our website: freshstartsolutions.com.au/bankruptcy-Gold Coast
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