When it comes to Filing for Bankruptcy in Gold Coast, there are a load of options that we get given depending on who we are, who we talk to, and exactly what has happened. One of the most common confusion 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 Gold Coast, much of the facts you receive on this matter will reflect the interests of the advice giver. That is why, if you call a debt consolidation company, I can guarantee you they will tell you to consolidate your debts. The debt consolidation industry is a multi-billion dollar industry making money in one very straightforward way: charging you a fee for aiding you wrap each one of your credit card and personal loans into just one neat and tidy bundle.

I hate to tell you this but these people aren’t doing it for free. Please don’t misunderstand me: if you believe your financial troubles in Gold Coast might be fixed by paying less interest, then go ahead and consider the possibilities. Even a little amount of interest saved over years easily adds up.

Usually I find if you read this blog you’ve most likely tried to consolidate your debts already and come to the following realisations similar to these:

  • Your credit rating is not good, and your credit file already has defaults 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 a tiny bit of interest just won’t make a lot of difference,.
  • You’ve most likely gotten to the stage where you’ve had enough, you’re mentally 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 comes down to Filing for Bankruptcy in Gold Coast, what’s the huge difference between a Debt Agreement and a Personal Insolvency Agreement?

Overall flexibility 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 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 offer a lump sum settlement figure or enter into a payment plan, or perhaps you can offer them assets rather than cash. This might sound fine when it comes to the issues 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 have to come to an understanding the deal. If they don’t, your plan is denied or will have to be renegotiated.

Generally people you owe money really want all their money back and also interest. Sometimes they’ll settle for under the amount you owe them – it’s normally a percentage of the debt– but let me 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.

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 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 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 Gold Coast 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 call Bankruptcy Experts Gold Coast on 1300 795 575, or visit our website: www.bankruptcyexpertsGoldcoast.com.au.