When it comes
down to Bankruptcy Maitland, there
are a bunch of options that we get given depending upon who we are, who we talk
to, and exactly what has happened. One of the most common trouble 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 Maitland, most of the help and advice you receive on this issue
will reflect the interests of the advice giver. Therefore, if you call a debt
consolidation company, I can promise you they will tell you to consolidate your
debts. The debt consolidation business is a multi-billion dollar industry
making money in one very simple way: charging you a fee for aiding you wrap
each one of your credit card and personal loans into a single neat and tidy
package.
I hate to tell
you this but these guys won't be doing it free of charge. Please do not
misunderstand me: if you feel your financial problems in Maitland can possibly
be solved by paying less interest, then go ahead and check out the choices.
Even a small amount of interest saved over years quickly adds up.
Normally I find
if you read this blog you've undoubtedly tried to consolidate your debts
already and come to the following realisations such as these:
- Your credit rating is no good, and your credit file already has defaults on it so no one 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 tiny bit of interest simply won't make a great deal of difference,.
- You've undoubtedly arrived at the point where you've had more than enough, you're mentally worn down, you can't go on one more day ignoring blocked calls on your phone, ignoring the demands in the mail and so on.
Personal Insolvency Agreements
So when it
concerns Bankruptcy in Maitland, 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
featuring the government trustee ITSA, and not a private firm that advertises
on TV. Basically this process is similar to Debt Agreements (DA): The trustee
holds 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 enter into a
payment plan, or you can offer them assets as an alternative to cash. This can
sound alright when it comes to the troubles with Bankruptcy - that is up until
you realize that one of the challenges with PIA's is that 75 % of the people
you owe money to need to agree on the deal. If they do not, your plan is
rejected or needs to be renegotiated.
Generally the
people you owe money prefer all their money back and also interest. Sometimes
they'll go for less than the amount you owe them - it's normally 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 really settle for.
Most of the time
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 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 settling 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 wise 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 Maitland aren't going to get that lucky!
If you wish to
learn more about what to do, where to turn and what questions to ask about Bankruptcy,
then feel free to contact Bankruptcy Experts Maitland on 1300 795 575, or visit
our website:bankruptcyexpertsMaitland.com.au.
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