When it comes down to Filing for Bankruptcy in Lismore, there are a bunch of options that we get given depending on who we are, who we talk to, and what exactly 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 Lismore, most of the help and advice you receive on this topic 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 basic way: charging you a fee for helping you wrap all of your credit card and personal loans into one neat and tidy package.
I hate to tell you this but these guys aren’t doing it for free. Please do not misunderstand me: if you believe your financial issues in Lismore might be fixed by paying less interest, then go on and look into the choices. Even a small amount of interest saved over years quickly adds up.
Normally I find if you are reading this blog you’ve most likely 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 definitely has nonpayments on it so not a single person 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 simply won’t make a great deal of difference,.
- You’ve most probably reached the stage where you’ve had enough, you’re emotionally worn down, you can’t go on yet another day ignoring blocked calls on your phone, ignoring the demands in the mail and so forth.
Personal Insolvency Agreements.
So when it relates to Filing for Bankruptcy in Lismore, what’s the big 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 – may I add – regulated trustee featuring the government trustee ITSA, and not a private organization that advertises on TV. Essentially this process resembles Debt Agreements (DA): The trustee has a meeting with the people you owe money to and these guys mediate 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 rather than cash. This can sound fine when it comes to the issues with Filing for Bankruptcy– that is up until you realize that one of the problems with PIA’s is that 75 % of the people you owe money to will have to agree on the deal. If they don’t, your plan is rejected or will need to be renegotiated.
Generally the people you owe money want all their money back and also interest. Sometimes they’ll go for beneath the amount you owe them – it’s generally 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 actually 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 heard of creditors settling for 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 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 Lismore 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 Filing for Bankruptcy, then feel free to call Bankruptcy Experts Lismore on 1300 795 575, or visit our website: www.bankruptcyexpertsLismore.com.au.