Filing for Bankruptcy in Tamwort – Choices, Choice, Choices.
When it comes down to Filing for Bankruptcy in Tamworth, there are a number of options that we get given depending on who we are, who we speak with, and exactly what has gone wrong. One of 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 Tamworth, much of the related information you receive on this subject will reflect the interests of the advice giver. That is why, if you call a debt consolidation provider, 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 basic way: charging you a fee for aiding you wrap every one of your credit card and personal loans into just one neat and tidy bundle.
I hate to tell you this but these guys aren’t going to be doing it free of charge. Please do not misunderstand me: if you feel your financial troubles in Tamworth might be fixed by paying less interest, then go on and look into the choices. Even a small amount of interest saved over years rapidly adds up.
Usually I find if you read this blog you’ve undoubtedly tried to consolidate your debts already and come to the following realisations like these:
- Your credit rating is no good, and your credit file already 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 tiny bit of interest just won’t make a lot of difference,.
- You’ve probably gotten to the point where you’ve had more than enough, you’re emotionally exhausted, you can’t go on another day ignoring blocked calls on your phone, ignoring the demands in the mail etc.
Personal Insolvency Agreements.
So when it comes to Filing for Bankruptcy in Tamworth, what’s the huge difference between a Debt Agreement and a Personal Insolvency Agreement?
Overall flexibility is the main thing 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 business that advertises on TV. Basically this process resembles Debt Agreements (DA): The trustee holds a meeting with the people you owe money to and these experts mediate a deal in your place. You can give a lump sum settlement figure or take part in a payment plan, or maybe you can offer them assets rather than cash. This might sound fine when it comes to the problems with Filing for Bankruptcy– that is up until you realize that one of the difficulties with PIA’s is that 75 % of the people you owe money to have to agree on the deal. If they don’t, your proposal is denied or needs to be renegotiated.
Generally the people you owe money prefer all their money back plus interest. Sometimes they’ll opt 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 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 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 opting 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 wise lawyers and some very clever structures in place and they offer 5 % of the debt, you might take it and be grateful. Sadly, ordinary punters like you and me in Tamworth 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 call Bankruptcy Experts Tamworth on 1300 795 575, or visit our website: www.bankruptcyexpertsTamworth.com.au.