Filing for Bankruptcy in Geelong– Choices, Choice, Choices.

When it comes down to Filing for Bankruptcy in Geelong, there are a ton of options that we get given depending upon who we are, who we approach, and just what has happened. Among the most common confusion I see with Filing for Bankruptcy is when it comes to selecting between Debt Consolidation, Personal Insolvency Agreements, and Bankruptcy itself.

Two Paths

Should I consolidate my debts?

When it comes to Filing for Bankruptcy in Geelong, a lot of the information and facts you receive on this topic will reflect the interests of the advice giver. Therefore, if you call a debt consolidation firm, I can guarantee 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 aiding you wrap each of your credit card and personal loans into a single 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 think your financial issues in Geelong may possibly be solved by paying less interest, then go on and investigate 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 similar to these:

  • Your credit rating is no good, and your credit file definitely has nonpayments on it so no one will give 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 lot of difference,.
  • You’ve most likely arrived at the point where you’ve had more than enough, you’re emotionally drained, 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 concerns Filing for Bankruptcy in Geelong, what’s the difference between a Debt Agreement and a Personal Insolvency Agreement?

Freedom is the main thing Personal Insolvency Agreements (PIA) have in their favour. They’re also administered by a registered and – might I add – regulated trustee including the government trustee ITSA, and not a private organization that advertises on TV. Ultimately this method is similar to Debt Agreements (DA): The trustee has a meeting with the people you owe money to and they mediate a deal in your place. You can give a lump sum settlement figure or enter into a payment plan, or you can offer them assets as an alternative to cash. This might sound alright when it comes to the troubles with Filing for Bankruptcy– that is up until you discover that one of the problems with PIA’s is that 75 % of the people you owe money to must agree on the deal. If they do not, your plan is rejected or will need to be renegotiated.

Generally the people you owe money prefer all their money back plus 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 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 come across creditors going 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 Geelong 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 contact Bankruptcy Experts Geelong on 1300 795 575, or visit our website: www.bankruptcyexpertsGeelong.com.au.

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