Bankruptcy in Bundaberg - Choices, Choice, Choices

When it comes to Bankruptcy Bundaberg, there are a lot of choices that we get given depending on who we are, who we talk to, and exactly what has gone wrong. 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 Bundaberg, most of the information and facts you receive on this subject will reflect the interests of the advice giver. Therefore, if you call a debt consolidation firm, I can promise 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 helping you wrap all of your credit card and personal loans into a single neat and tidy package.

I hate to tell you this but these people aren't doing it free of charge. Please don't misunderstand me: if you consider your financial issues in Bundaberg can possibly be solved by paying less interest, then go on and investigate the options. 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 similar to these:

• Your credit rating is no good, and your credit file already has defaults on it so nobody 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 a tiny bit of interest simply won't make a lot of difference,.

• You've likely gotten to the stage where you've had more than 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 comes down to Bankruptcy in Bundaberg, 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 company that advertises on TV. Essentially this process is similar to Debt Agreements (DA): The trustee has a meeting with the people you owe money to and they mediate a deal on your behalf. You can offer a lump sum settlement figure or enter into a payment plan, or perhaps you can offer them assets rather than cash. This may sound acceptable when it comes to the problems with Bankruptcy - that is up until you realize that one of the challenges with PIA's is that 75 % of the people you owe money to have to come to an understanding the deal. If they don't, your plan is rejected or has to be renegotiated.

Generally the 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 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.

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 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 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 Bundaberg 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 call Bankruptcy Experts Bundaberg on 1300 795 575, or visit our website:bankruptcyexpertsBundaberg.com.au.