Going Bankrupt in Melbourne - Choices, Choice, Choices



When it comes down to Going Bankrupt in Melbourne, there are a great deal of choices that we get given depending upon who we are, who we talk to, and what exactly has happened. The most common confusion I see with Going Bankrupt is when it comes to selecting between Debt Consolidation, Personal Insolvency Agreements, and Bankruptcy itself.

Should I consolidate my debts?

When it comes to Going Bankrupt in Melbourne, much of the information you receive on this subject will reflect the interests of the advice giver. Therefore, if you call a debt consolidation provider, 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 assisting you wrap every one of your credit card and personal loans into just one neat and tidy package.

I hate to tell you this but these people aren't doing it for free. Please do not misunderstand me: if you consider your financial troubles in Melbourne may be solved by paying less interest, then go on and check out 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 attempted to consolidate your debts already and come to the following realisations such as these:
·         Your credit rating is no 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 bit of interest just won't make a lot of difference,.
·         You've most probably arrived at the stage where you've had more than enough, you're mentally fatigued, you can't go on one more day ignoring blocked calls on your phone, ignoring the demands in the mail etc.

Personal Insolvency Agreements

So when it comes to Going Bankrupt in Melbourne, what's the difference between a Debt Agreement and a Personal Insolvency Agreement?

Freedom is the main point 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 company that advertises on TV. Basically this method resembles Debt Agreements (DA): The trustee has a meeting with the people you owe money to and these guys 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 rather than cash. This might sound acceptable when it comes to the troubles with Going Bankrupt- that is up until you discover that one of the difficulties with PIA's is that 75 % of the people you owe money to need to agree on the deal. If they don't, your proposal is denied or will have to be renegotiated.

Generally people you owe money prefer all their money back as well as interest. Sometimes they'll go for beneath the amount you owe them - it's generally 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 really settle for.

Most of the time 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 Going Bankrupt and insolvency I've heard of creditors opting 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 shrewd 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 Melbourne 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 Going Bankrupt, then feel free to contact Bankruptcy Melbourne on 1300 795 575, or visit our website: www.bankruptcy-Melbourne.com.au

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