When it comes down to Filing for Bankruptcy in Darwin, there are a bunch of choices that we get given depending on who we are, who we approach, and exactly what has happened. 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 Darwin, most of the information and facts you receive on this matter will reflect the interests of the advice giver. That is why, 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 straightforward way: charging you a fee for assisting you wrap all of your credit card and personal loans into just one neat and tidy package.
I hate to tell you this but these people aren’t doing it for free. Please do not misunderstand me: if you consider your financial issues in Darwin might be solved by paying less interest, then go on and check out the choices. Even a tiny amount of interest saved over years easily adds up.
Typically I find if you are reading this blog you’ve most likely attempted to consolidate your debts already and come to the following realisations like these:
- Your credit rating is not good, and your credit file definitely has nonpayments on it so nobody 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 small amount of interest simply won’t make a great deal of difference,.
- You’ve most probably reached the point where you’ve had more than enough, you’re emotionally worn down, you can’t go on another day ignoring blocked calls on your phone, ignoring the demands in the mail and so on.
Personal Insolvency Agreements.
So when it relates to Filing for Bankruptcy in Darwin, what’s the huge difference between a Debt Agreement and a Personal Insolvency Agreement?
Adaptability 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 firm that advertises on TV. Ultimately this process resembles Debt Agreements (DA): The trustee has a meeting with the people you owe money to and these guys negotiate a deal on your behalf. You can offer a lump sum settlement figure or take part in a payment plan, or you can offer them assets as an alternative to cash. This might sound fine when it comes to the problems with Filing for Bankruptcy– that is until you discover that one of the challenges with PIA’s is that 75 % of the people you owe money to need to come to an understanding the deal. If they do not, your plan is rejected or has to be renegotiated.
Generally people you owe money prefer all their money back in addition to interest. Sometimes they’ll settle for under 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 actually settle for.
In most cases 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 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 choosing 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 smart 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 Darwin 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 Filing for Bankruptcy, then feel free to contact Bankruptcy Experts Darwin on 1300 795 575, or visit our website: www.bankruptcyexpertsDarwin.com.au.