When it comes
down to Bankruptcy Hobart, there are
a number of options that we get given depending upon who we are, who we speak
to, and what exactly has happened. Among 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 Hobart, much of the help and advice you receive on this matter
will reflect the interests of the advice giver. Therefore, 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 most of your credit card and personal loans into just one neat and tidy
bundle.
I hate to tell
you this but these guys aren't doing it free of charge. Please don't
misunderstand me: if you feel your financial problems in Hobart might be solved
by paying less interest, then go on and look into the options. Even a small
amount of interest saved over years easily adds up.
Usually I find
if you are reading this blog you've undoubtedly attempted to consolidate your
debts already and come to the following realisations similar to these:
- Your credit rating is no good, and your credit file definitely has nonpayments on it so not a single person will offer you a loan, consolidated or otherwise,.
- By the time you work it all out, you're so far down a hole that saving a small amount of interest just won't make a great deal of difference,.
- You've quite possibly gotten to the stage where you've had enough, you're mentally worn down, 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
concerns Bankruptcy in Hobart, what's the huge difference between a Debt
Agreement and a Personal Insolvency Agreement?
Freedom 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 including
the government trustee ITSA, and not a private business that advertises on TV.
Ultimately this method is similar to Debt Agreements (DA): The trustee has 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 enter into a payment
plan, or maybe you can offer them assets as an alternative to cash. This might
sound acceptable when it comes to the problems with Bankruptcy - that is up
until you discover that one of the problems with PIA's is that 75 % of the
people you owe money to must agree on the deal. If they do not, your proposal
is denied or has to be renegotiated.
Generally people
you owe money want all their money back in addition to interest. Sometimes
they'll opt for less than 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.
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 going 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 wise 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 Hobart 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 Bankruptcy Advice Hobart on 1300
879 867, or visit our website:bankruptcy-advice.com.au/Hobart .
No comments:
Post a Comment