Skip to main content Skip to search

Archives for May 2015

Debt Agreement – A Positive Alternative to Bankruptcy

If you are struggling to repay your debts on time and are considering applying for bankruptcy, it is important that you weigh up all of the options available to you before you proceed. Declaring bankruptcy can be a life changing decision and should be used as your last resort.

Bankruptcy carries serious consequences for your financial future, including difficulty in obtaining credit for a considerable amount of time. You could also lose significant assets such as your home and, depending on your industry, your employment could be affected.

Declaring bankruptcy was the only legal solution to debt in the past, but now Debt Agreements – a relatively recent initiative by the Australian Government –offer a positive legal alternative for Australians who want to avoid the harsh consequences of filing for bankruptcy. A Debt Agreement allows one to pay their creditors an agreed amount – usually a percentage of the current amount owing – over a set period of time. Once the agreement has been completed, any remaining balance will be legally written off.

Debt Agreements have helped thousands of Australians to regain control of their finances. According to the Australian Financial Security Authority (AFSA), Debt Agreements are increasing in popularity as a solution for unmanageable debt. As a result of this popularity, the number of Australians who filed for bankruptcy in the December quarter of last year decreased – and it is expected to continue decreasing over the coming years.

At Debt Free Australia (DFA), our Registered Debt Agreement Administrator can supervise your entire Debt Agreement from start to finish. Our CEO is registered with both AFSA and the Australian Securities and Investments Commission, which means that we are fully licensed and qualified to handle every single aspect of the process, and will not pass your case around from one company to another.

Read more

Declaring Yourself Bankrupt

Declaring yourself bankrupt is a life changing decision that can come with serious consequences. That’s why at Debt Free Australia (DFA), we want to ensure that bankruptcy is the most suitable option for you before you proceed with filing the papers.
DFA offers a comprehensive free debt assessment for those facing financial difficulties. If the results of our assessment determine that you are indeed in need of declaring yourself bankrupt, we see it as our role to firstly educate you about bankruptcy. We provide free expert and impartial bankruptcy advice covering Australian bankruptcy laws, which debts are included in bankruptcy, what will happen to your assets, and so on.
At DFA, we offer services in bankruptcy form completion and lodgment with the Australian Financial Security Authority. Our once-off fee for helping to fill out your forms for voluntary bankruptcy starts from just $400.
Declaring yourself bankrupt does not have to be a daunting or complicated task with DFA. Call our personal debt advisors on 1800 676 598 to get debt free today. All calls are confidential and you may remain anonymous if you wish.

Read more

Debt Agreement – Good or Bad?

If you are considering applying for a Debt Agreement, there are many important factors you need to consider. Debt Free Australia (DFA) has compiled a list of the main benefits and consequences of entering into a Debt Agreement.
The good:

  • The required repayments under a Debt Agreement are based on the amount you can afford –not the amount your creditors want.
  • Repayments can be made flexible, allowing you to maximise your available funds and still meet your existing financial commitments (eg., your car leases and mortgages). Your repayments will correspond to your payroll cycle,making it easier to budget.
  • Once you lodge a Debt Agreement with AFSA, any pending or current legal action for debt recovery will be suspended. If your creditors accept the proposal, any legal action against you will be cancelled.
  • Once your Debt Agreement is accepted, interest on your debts will be frozen, meaning that your repayments will actually reduce the amount of your debt.
  • A Debt Agreement lasts for anywhere between 3-5 years, giving you a foreseeable end to your debt repayments.
  • You will be able to keep your car, house and other assets – as long as payments for these are maintained.
  • There are less restrictions under a Debt Agreement than in a bankruptcy; for instance, you will be free to travel abroad.

The bad:

  • There will be a permanent record of your Debt Agreement kept on the National Personal Insolvency Index.
  • Your involvement in a Debt Agreement will be recorded on credit reporting databases for a minimum of five years.
  • Aside from the mark on your credit file, there will be restrictions placed on your applying for more credit during the time that you are under the Debt Agreement.

If you have weighed up the pros and cons and determined that entering into a Debt Agreement is the best debt solution for you, DFA can help.
At DFA, we have a proven track record in helping Australians successfully settle their unaffordable debt through Debt Agreements.
For more information or free financial advice, call DFA today on 1800 676 598.

Read more

Getting Rid Of Debt For Good!

In a perfect world, we would go through our entire life completely debt-free, but unfortunately it doesn’t work this way for most of us. The majority of people need a mortgage to pay for their homes and finance for their car repayments, and when emergencies arise (or even if they don’t!) the credit cards are always there to sort things out quickly.
Having debt isn’t bad in itself – it is almost essential to have at least some debt these days, as many contracts for services and utilities require you to have a credit history. The type of debt and amount of debt that you have, however, can have a huge impact on your life. There is a big expectation in society to live luxuriously, which often leads people to living beyond their means; this is one of the main factors driving people deep into credit card debt. Unmanageable debt can affect anyone – regardless of how much or little you think you owe, that feeling of depression and helplessness remains the same.
So to help Australians get on the path to living debt free, Debt Free Australia share some of their useful tips.
1. Take Immediate Action
If you are feeling overwhelmed by your rapidly increasing debt problem, now is the time to seek help. Sleepless nights are not uncommon when you are thinking about how long it will take you to completely pay off your debts, and waiting is only going to make things worse. At Debt Free Australia we are committed to helping people overcome their personal debt problems for good.
A common trend in making monthly debt repayments is to only pay the minimum required amount, which seems quite manageable. If you are only making the minimum payments, though, your debt level is going to keep increasing – by the time you realise you have a debt problem it is often too hard to manage. At Debt Free Australia we recommend drawing up a budget and working out the maximum amount you can afford to put toward your debts. Once you have that amount – stick to it.
Even a small amount over and above your minimum required payments will help to motivate you and make you feel better about your capacity to repay your debts.
2. Find Out Where You Are Sabotaging Your Finances
If you want to repay your debt as quickly as possible, you need to seriously examine what you are spending your funds on. It is important to put as much money towards your debt as possible, but you want to do this without creating a feeling of extreme sacrifice, which will only make it harder to stick to your budget. If you examine your budget and find that you are spending too much on something that could be a lot cheaper, make the necessary changes. Allow a minimal amount for eating out occasionally, or a haircut or clothes shopping. Your budget needs to be comprehensive and realistic, otherwise you run the risk of blowing it out.
The most important step is to start actively trying to rid yourself of debt. Waiting to see what will happen, or simply hoping that things will improve, is only going to lead to more trouble. If you are struggling with debt repayments, you need to seek financial advice. Call us at Debt Free Australia today on 1800 676 598 to get on track and start ridding yourself of personal debt.

Read more

Personal Insolvency Agreements give struggling australians a glimmer of hope

Personal Insolvency Agreements are increasingly providing an effective form of debt relief for everyday Australians. They provide hope for the nearly 30,000 individuals across the nation who, according to statistics released by the Australian Financial Security Authority, report being personally insolvent on an annual basis.

Rajesh Narad, a mortgage broker with Loan Market, entered into a Personal Insolvency Agreement in June last year to avoid bankruptcy. Despite owing more than $1.3 million to his creditors, MrNarad was able to negotiate a settlement amount of $100,000 – equating to less than 10 cents in the dollar.

As can be seen by MrNarad’s case, Personal Insolvency Agreements can be a viable option for those who are struggling to repay their debts in full but able to pay a percentage. Many people immediately think of filing for bankruptcy when they find themselves unable to pay back their debts, but there are less serious debt solutions available to them.

A Personal Insolvency Agreement is a legal alternative to bankruptcy that has less harsh consequences for the individual’s financial future and allows for much more flexibility.

It is an arrangement that debtors can negotiate with their creditors when they are no longer able to repay their debts in full. The agreement allows debtors to pay back an agreed amount over a period of time (usually ranging from three to five years). Most Personal Insolvency Agreements allow the debtor to settle their debts for less than what was originally owed, and when the agreement has been completed any remaining balance will be legally written off – as it was in MrNarad’s situation.

However, there are consequences to entering into a Personal Insolvency Agreement. For one, it will be listed on individuals’ credit file for five years. There will also be a permanent record of the debtor going into a Personal Insolvency Agreement on the National Personal Insolvency Index.

“Debtors may have concerns about setting up a Personal Insolvency Agreement, such as the effect on their credit rating and it being on a public record”, says Anthony Warner, Senior Partner of personal insolvency firm Debt Free Australia. “But it is an ideal option for many and offers a brighter future for insolvent Australians.”

Debt Free Australia has a fully licensed Registered Trustee on site who can help debtors to negotiate a Personal Insolvency Agreement with their creditors.

For further information on Personal Insolvency Agreements, or for interview opportunities with Anthony Warner, do not hesitate to contact (02) 8021 3189 or samantha@tmaconsolidated.com.au.

Read more

Going Bankrupt Does Not Have to be a Daunting Task

Going bankrupt does not have to be a daunting or complicated task. If you are considering applying for bankruptcy, Debt Free Australia (DFA) can make the process easier for you.

Before you proceed with the paperwork, though, you need to carefully consider whether going bankrupt is the most appropriate solution for you. DFA offers a free online debt assessment for anyone contemplating bankruptcy, to help determine the best debt solution for their personal situation.

If the assessment concludes that going bankrupt is the best option for you, DFA’s team of expert and licensed insolvency specialists can then provide the right advice and information regarding bankruptcy laws and your legal duties.

Going bankrupt will mean you need to fill and lodge bankruptcy forms, including a Statement of Affairs and a Debtor’s Petition. DFA can make this task simpler for you with our form completion and lodgment service.

Call our personal debt advisors today on 1800 676 598 for professional, impartial advice. All calls are confidential and can remain anonymous if you wish.

Read more

The Benefits of Consolidation Loans

If you are in debt and have a good credit record, combining all your debts into one single consolidation loan may be the best solution for you.

A consolidation loan is an affordable way for debtors to get their finances back under control in a shorter amount of time. Advantages of taking out a consolidation loan include the following:

  • Lower interest rates. Consolidation loans often have lower interest rates than other credit facilities, such as credit cards, meaning you can reduce the amount of your debt a lot quicker.
  • Reduced number of payments to manage each month. Combining all of your debts into a consolidation loan means that you only have to make one single repayment, making management of your finances easier and eliminating possible late payment fees.
  • Less stress. Having only one loan to manage makes the debt repayment process less chaotic and stressful.
  • Full awareness of repayment amounts. You will know the exact amount of money you need to repay each month for the life of the consolidation loan.
  • Improved credit rating. Taking out a consolidation loan can improve your credit rating, as you will be less likely to miss payments.

A consolidation loan will only help you, however, if you rid yourself of each credit card that the loan is paying out and maintain all of the loan repayments. It is very easy to be tempted by a credit card with a zero balance, and using the cards again will make your situation doubly worse. If your credit rating has been damaged by the debt you are currently in, you might not be approved for a consolidation loan. In this case, you would need to consider a more formal arrangement to repay your debts affordably, such as a debt agreement or a personal insolvency agreement

If you are considering taking out a consolidation loan to repay your debts, or if you have applied for a consolidation loan and been rejected, call our professional team of debt advisors today on 1800 676 598 for more information and free advice.

Read more