Debt Reduction Services
Debt reduction services usually take the form of an informal or formal arrangement with your creditors. To understand the differences between informal or formal arrangements with creditors click here or read below.
If you have multiple creditors and are struggling to keep up with all of the repayments you may wish to consider an informal arrangement with your creditors. Click here to learn how you can negotiate an informal arrangement with your creditors.
If you have been struggling with unsecured debt for some time then a formal arrangement with your creditors may be more appropriate.
There are different types of formal arrangements and the appropriate one for you will depend on your circumstances. The relevant factors which need to be considered are:
- Your unsecured debt levels;
- Your income after tax; and
- Your assets.
If you elect for a formal arrangement, we strongly advise that you carefully select the service provider. Here at Debt Free, we are:
If you need advice on debt reduction services call us today on 1800 676 598.
How to get Debt Relief
Are you getting stressed by constant creditor demands?
Don’t ignore the warning signs – those demands can quickly escalate to court action. If left unattended this will result in your bankruptcy…That’s how serious it can get.
Stress from debt can affect your health. If you are concerned take our 2 minute debt stress test. Please consult your doctor if you are concerned that stress is causing health issues.
So, how do you get debt relief? Is there even such a thing? The short answer is yes!
However, choosing the appropriate debt relief service can be time consuming and confusing. To make it easier for you, we have prepared a detailed comparison of the available services. If you want to discuss the differences you can call us any time between 9am and 5pm weekdays on 1800 676 598.
Once you have chosen the best debt relief solution to suit your circumstances you will then need to appoint a company that you can trust. Debt Free has been specialising in debt relief services since 2006 and have helped hundreds of Australians get out of debt. Take a minute to read why you should choose Debt Free.
We are dedicated to help Australians find the right solution.
Don’t get overwhelmed and don’t delay, pick up the phone and speak to our friendly professional debt advisers. Call our toll free advice line on 1800 676 598 or fill in the form to the right hand side of the screen, and we will get back to you.
It’s that easy!
What are my options if I have been refused a debt consolidation loan?
If you have recently applied for a debt consolidation loan but were refused, there may be several reasons for this:
- firstly, you have a poor credit record or payment history?
- secondly, you don’t have any assets which could be pledged to secure the loan?
If you were refused on the basis of having a poor credit record or poor payment history and you have several debts which need to be managed, then you have 2 options to consider. We will help you better understand these 2 options:
- informal creditor arrangement; or a
- formal creditors arrangement.
An informal arrangement can be advantageous if you only have 2 or 3 creditors. If you have more than 3 creditors, getting all of them to agree can be problematic. Click here to view our tips when trying to negotiate an informal arrangement with your creditors.
A formal arrangement is most appropriate for people who can’t repay their debts (i.e they are insolvent).
If you are insolvent you basically have three options:
- Debt Agreement;
- Personal Insolvency Agreement
What are the differences between informal –v- formal creditor arrangements?
Understanding the differences between informal and formal creditor arrangements is critical. Most people can set up informal arrangements themselves, whereas formal creditor arrangements are usually set up by a licenced insolvency practitioner. To better understand the differences between informal –v- formal creditor arrangements please view our comparison table by clicking here.
You can get more information about your options, by calling our friendly personal debt advisors on 1800 676 598.
Can You Get a Mortgage After a Debt Agreement?
Many people ask the same question – will I be prevented from getting a home loan in the future if I enter into a Debt Agreement or a Personal Insolvency Agreement?
The answer is: not necessarily.
It will of course depend on your financial circumstances at the time and the lender as each lender will assess your application differently using their criteria, but in our experience our clients have been able to get loans after successfully completing their agreements.
A few things to be aware of before entering into a Debt Agreement or a Personal Insolvency Agreement:
- Both of these agreements will show up on your credit file for seven years from when you first entered into them. Whilst the agreement is still on foot you won’t be able to get new credit.
- Once you have completed your agreement it will be updated as such on your credit file. This notation will remain in place until the full 7 year period has lapsed. So if you complete your agreement after 3 years, it will stay on your credit file for another 4 years.
- After the seven-year period has lapsed your credit file should be fully restored. This means all defaults previously listed on your file will be wiped (assuming you haven’t defaulted again since entering into the agreement).
You will find that entering into a Debt Agreement or a Personal Insolvency Agreement offers more flexibility compared to formal bankruptcy, compare the differences by clicking here.
To get more information about these agreements call our friendly personal debt advisors on 1800 676 598.
Unpaid personal debts can put your home at risk
What debts can put your home at risk?
Do you have a credit card, personal loan or store credit which exceeds $5,000? If you do and you fall behind in your payments or stop making payments, any individual creditor owed $5,000 or more can petition for your bankruptcy.
How does bankruptcy affect your home?
If you are made bankrupt and you own a home, you stand to lose it. Your Bankruptcy Trustee will make an assessment on the value of your home and will establish what equity is in it. Depending on how much equity is in it, your Trustee may seek to sell it immediately. If there is little or no equity in it, then the Trustee will most likely lodge a caveat over the property and review the situation every year. What most people won’t realise is that the Trustee has six years after you have been discharged from bankruptcy (i.e. 9 years after you first became bankrupt) to realise the equity in the property and this period can be extended by the Trustee by simply writing to you before this period expires.
How can you save your home?
If you have become bankrupt and you own a home you should take immediate steps to encourage a family member or your spouse to make an offer to your Trustee. Even if the Trustee doesn’t intend to take immediate steps to sell the property (due to insufficient equity), it is best to make a commercial offer to your Trustee to resolve the matter early on in your bankruptcy. If the situation is left unattended and the equity builds up (as house prices increase) the Trustee will then obviously seek to realise the increased value.
If you have unpaid debts and they are over $5,000 don’t ignore the problem and put your house at risk. Call our bankruptcy consultants on 1800 676 598.