When it comes to Filing for Bankruptcy in Geraldton, there are a lot of choices that we get given depending upon who we are, who we talk to, and what exactly has gone wrong. One of the most common trouble I see with Filing for 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 Filing for Bankruptcy in Geraldton, a lot of the facts you receive on this subject will reflect the interests of the advice giver. That is why, if you call a debt consolidation provider, I can promise you they will tell you to consolidate your debts. The debt consolidation industry is a multi-billion dollar industry making money in one very basic 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 these people aren’t going to be doing it for free. Please don’t misunderstand me: if you believe your financial problems in Geraldton might be fixed by paying less interest, then go ahead and consider the possibilities. Even a small amount of interest saved over years quickly adds up.
More often than not I find if you are reading this blog you’ve probably 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 already has nonpayments on it so not a single person 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 on a bit of interest just won’t make a lot of difference,.
- You’ve most likely arrived at the stage where you’ve had more than enough, you’re mentally exhausted, 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 comes to Filing for Bankruptcy in Geraldton, 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 agency 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 they mediate 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 might sound alright when it comes to the issues with Filing for Bankruptcy– that is until you realize that one of the difficulties with PIA’s is that 75 % of the people you owe money to need to agree on the deal. If they don’t, your plan is rejected or will have to be renegotiated.
Generally people you owe money really want all their money back and also interest. Sometimes they’ll go for less than the amount you owe them – it’s generally 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 in fact settle for.
In many 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 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 Filing for 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 brilliant 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 Geraldton 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 Filing for Bankruptcy, then feel free to contact Bankruptcy Experts Geraldton on 1300 795 575, or visit our website: www.bankruptcyexpertsGeraldton.com.au.