When it comes down to Filing for Bankruptcy in Rockhampton, there are a bunch of options that we get given depending upon who we are, who we talk to, and just what has gone wrong. Among 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.

Two Paths

Should I consolidate my debts?

When it comes to Filing for Bankruptcy in Rockhampton, a lot 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 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 simple way: charging you a fee for aiding you wrap every one of your credit card and personal loans into a single neat and tidy package.

I hate to tell you this but these guys won’t be doing it for free. Please don’t misunderstand me: if you think your financial problems in Rockhampton could be solved by paying less interest, then go ahead and look into the choices. Even a little amount of interest saved over years rapidly adds up.

Normally I find if you are reading this blog you’ve probably tried to consolidate your debts already and come to the following realisations like these:

  • Your credit rating is no good, and your credit file definitely 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 small amount of interest just won’t make a lot of difference,.
  • You’ve likely arrived at the point where you’ve had enough, you’re mentally drained, you can’t go on yet another day ignoring blocked calls on your phone, ignoring the demands in the mail and so on.

Personal Insolvency Agreements.

So when it comes to Filing for Bankruptcy in Rockhampton, what’s the huge 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 company 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 these guys arrange a deal in your place. You can give a lump sum settlement figure or take part in a payment plan, or 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 realise that one of the difficulties with PIA’s is that 75 % of the people you owe money to must agree on the deal. If they do not, your proposal is rejected or will have to be renegotiated.

Generally people you owe money want all their money back and also interest. Sometimes they’ll opt for beneath 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 actually settle for.

In most 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 come across 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 Rockhampton 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 contact Bankruptcy Experts Rockhampton on 1300 795 575, or visit our website: www.bankruptcyexpertsRockhampton.com.au.