When it comes down to Filing for Bankruptcy in Dubbo, there are a bunch of options that we get given depending on who we are, who we speak to, and exactly what has happened. One of the most common confusion 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 Dubbo, a lot of the information 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 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 simple way: charging you a fee for helping you wrap each of your credit card and personal loans into just one neat and tidy package.
I hate to tell you this but these guys aren’t doing it for free. Please don’t misunderstand me: if you think your financial troubles in Dubbo might be solved by paying less interest, then go on and check out the possibilities. Even a small amount of interest saved over years rapidly adds up.
Typically I find if you read this blog you’ve most likely 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 already has nonpayments on it so no one 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 bit of interest just won’t make a lot of difference,.
- You’ve most likely arrived at 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 forth.
Personal Insolvency Agreements.
So when it comes to Filing for Bankruptcy in Dubbo, what’s the big 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 including the government trustee ITSA, and not a private company that advertises on TV. Basically this method resembles Debt Agreements (DA): The trustee has a meeting with the people you owe money to and these experts work out a deal on your behalf. You can give a lump sum settlement figure or enter into a payment plan, or you can offer them assets rather than cash. This might sound okay when it comes to the complications with Filing for Bankruptcy– that is up until you realise that one of the difficulties with PIA’s is that 75 % of the people you owe money to will have to come to an understanding the deal. If they do not, your plan is rejected or will need to be renegotiated.
Generally the people you owe money want all their money back as well as interest. Sometimes they’ll opt for less than the amount you owe them – it’s typically a percentage of the debt– but let me 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 truly 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 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 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 Dubbo aren’t going to get that lucky!
If you wish 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 Dubbo on 1300 795 575, or visit our website: www.bankruptcyexpertsDubbo.com.au.