Filing for Bankruptcy in Wollongong – Choices, Choice, Choices.
When it comes down to Filing for Bankruptcy in Wollongong, there are a lot of choices that we get given depending upon who we are, who we approach, and exactly what has gone wrong. 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 Wollongong, most 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 firm, I can guarantee 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 just one neat and tidy bundle.
I hate to tell you this but they aren’t doing it free of charge. Please don’t misunderstand me: if you think your financial issues in Wollongong might be fixed by paying less interest, then go on and look into the choices. Even a little amount of interest saved over years easily adds up.
Normally I find if you are reading this blog you’ve undoubtedly 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 definitely has nonpayments on it so nobody 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 on a small amount of interest just won’t make a great deal of difference,.
- You’ve quite possibly reached the point where you’ve had more than enough, you’re emotionally burnt out, 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 Wollongong, 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 – may I add – regulated trustee featuring the government trustee ITSA, and not a private business that advertises on TV. Basically this process is similar to Debt Agreements (DA): The trustee has a meeting with the people you owe money to and they negotiate a deal on your behalf. You can offer a lump sum settlement figure or take part in a payment plan, or maybe you can offer them assets as an alternative to cash. This can sound fine when it comes to the troubles with Filing for Bankruptcy– that is until you realize that one of the challenges with PIA’s is that 75 % of the people you owe money to need to agree on the deal. If they do not, your plan is rejected or has to be renegotiated.
Generally the people you owe money want all their money back as well as interest. Sometimes they’ll settle for beneath the amount you owe them – it’s generally a percentage of the debt– but allow me to 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 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 heard of creditors choosing less 80 % on rare occasions, but that usually only occurs with a public company entering 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 clever 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 Wollongong 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 Wollongong on 1300 795 575, or visit our website: www.bankruptcyexpertsWollongong.com.au.