When it comes down to Filing for Bankruptcy in Mackay, there are a lot of options that we get given depending upon who we are, who we approach, and what exactly has gone wrong. Among the most common trouble I see with Filing for 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 Filing for Bankruptcy in Mackay, much of the information you receive on this matter will reflect the interests of the advice giver. Therefore, if you call a debt consolidation firm, 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 one neat and tidy package.
I hate to tell you this but these guys aren’t going to be doing it for free. Please don’t misunderstand me: if you believe your financial problems in Mackay could be solved by paying less interest, then go ahead and consider the choices. Even a little amount of interest saved over years rapidly adds up.
Typically 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 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 tiny bit of interest simply won’t make a lot of difference,.
– You’ve undoubtedly reached the stage where you’ve had more than enough, you’re mentally exhausted, you can’t go on another day ignoring blocked calls on your phone, ignoring the demands in the mail etc.
Personal Insolvency Agreements.
So when it concerns Filing for Bankruptcy in Mackay, what’s the big difference between a Debt Agreement and a Personal Insolvency Agreement?
Flexibility 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. Ultimately this method resembles Debt Agreements (DA): The trustee has a meeting with the people you owe money to and they 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 rather than cash. This might sound fine when it comes to the issues with Filing for Bankruptcy– that is until you realize that one of the obstacles 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 proposal is denied or ought to be renegotiated.
Generally the people you owe money really want all their money back plus interest. Sometimes they’ll settle for beneath the amount you owe them – it’s typically a percentage of the debt– but allow me to 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 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 Filing for Bankruptcy and insolvency I’ve come across creditors opting 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 shrewd 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 Mackay 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 Filing for Bankruptcy, then feel free to call Bankruptcy Experts Mackay on 1300 795 575, or visit our website: www.bankruptcyexpertsMackay.com.au.