Bankruptcy in Brisbane - Choices, Choice, Choices

When it comes down to Bankruptcy Brisbane, there are a load of choices that we get given depending on who we are, who we speak to, and what exactly has gone wrong. The most common trouble I see with 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 Bankruptcy in Brisbane, much of the info you receive on this topic will reflect the interests of the advice giver. That is why, 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 basic way: charging you a fee for assisting you wrap each one of your credit card and personal loans into just one neat and tidy package.

I hate to tell you this but they won't be doing it for free. Please do not misunderstand me: if you believe your financial issues in Brisbane may possibly be solved by paying less interest, then go ahead and explore the options. Even a small amount of interest saved over years rapidly adds up.

Usually I find if you read this blog you've probably attempted to consolidate your debts already and come to the following realisations like these:

• Your credit rating is not good, and your credit file definitely has defaults 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 a tiny bit of interest simply won't make a great deal of difference,.
• You've quite possibly gotten to the point where you've had more than enough, you're mentally burnt out, you can't go on one more day ignoring blocked calls on your phone, ignoring the demands in the mail and so forth.

Personal Insolvency Agreements

So when it comes to Bankruptcy in Brisbane, what's the big 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. Ultimately this process resembles Debt Agreements (DA): The trustee has a meeting with the people you owe money to and these guys arrange a deal on your behalf. You can give a lump sum settlement figure or enter into a payment plan, or you can offer them assets rather than cash. This might sound okay when it comes to the problems with 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 have to come to an understanding the deal. If they don't, your plan is rejected or will need to be renegotiated.

Generally the people you owe money really want all their money back and also interest. Sometimes they'll settle for less than the amount you owe them - it's typically 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 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 Bankruptcy and insolvency I've heard of creditors settling 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 smart 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 Brisbane 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 Bankruptcy, then feel free to call Bankruptcy Advice Brisbane on 1300 879 867, or visit our website:bankruptcy-advice.com.au/Brisbane .