If you are wondering how to get rid of debt, you have come to the right place. At Debt Free Australia, we are passionate about helping Australians become debt free for over 20 years and continue to do so. Based on our years of experience, we have compiled our top 5 tips on how to get rid of debt.
 
1. Make the decision to stop borrowing money
Stop taking out loans that you know you cannot afford to pay back and try to limit the amount of money you borrow from your family and friends unless it is an emergency. This will force you to face reality and see that you are running dangerously low on funds and that you need to make changes in your life to rectify this.
 
2. Work out how much in debt you are
It seems like daunting, difficult task to complete, and it is. However, it is crucial in helping you get out of debt so that you know what you are up against and what you have to do to fix it. Take time out to sit down and work out all your expenses, money that you are owed and bills you have to pay to gain valuable insight into your financial state.

After you have done this, organise your debts. Prioritise the ones you really need to pay first to the ones that you can put off for a bit longer. This includes debts with high-interest rates or mortgage bills.
 
3. Create a realistic budget
If you want to know how to get rid of debt, then an important step is to create a realistic budget. The keyword here is realistic. This means don’t go overboard with how much you are willing to cut out if you are unable to sustain it over a period of time. You are just setting yourself up for failure which will not only derail your chances of getting out of debt but is also disheartening and can cause you to become further dispirited. Instead, find the balance between creating a budget that you can sustain but also means that you are not spending more than necessary and saving money.
 
4. Explore debt solutions
If you are wondering how to get rid of debt and have already tried the other options, then it may be time to explore professional debt solutions. Each solution has its advantages and disadvantages and the one that you should take depends on your situation. It can be daunting and time-consuming process knowing which solution best suits your needs. This is why you should enlist professional help from debt consultants who can give you impartial advice so that your best interests, not theirs, are prioritised.
 
Debt Free Australia is a reputable company that prides itself on giving fair and unbiased advice for those who are wondering how to get rid of debt. We offer a range of debt solutions and will carefully explain each one to you so that you can completely understand your options and help identify which one you should follow. If you would like to speak to one of our trained consultants who can help you choose the right solution, then please contact us on 1800 462 767.
 

Earlier in the year, we explained the concept of ‘Buy Now, Pay Later’ services – a payment option that allows you to purchase a product in store or online without paying for it immediately.

One of the platforms, Afterpay, has now expanded into travel services.

This means their customers will pay for their holidays in a series of interest-free instalments prior to their departure date. The attraction is in the idea of a luxurious holiday that is paid for in weekly or fortnightly installments, rather than one lump sum in the beginning.

Although many people find that this model works for them, there are some potential risks.

Since the majority of AfterPay users are aged between 18-34, they may not have the financial knowledge or experience to realise what they are committing themselves to. AfterPay exploits a loophole in the national credit laws to forego a credit check before consumers can use its service. As such, many Australians may be unaware of their financial situation, and thus overcommitting to an AfterPay holiday without truly knowing what they will be liable for.

Furthermore, this controversial scheme thrives off interest charges and hidden fees, making approximately $28.4 million from late fees alone. Despite often being advertised as ‘interest free’, if you don’t make your repayments on time, the fees can accumulate to large sums. It all adds up incrementally and can become very overwhelming, especially if you have just splurged on a holiday.

If you would like to learn more about your options to deal with unmanageable debt, contact our friendly and professional debt advisors at Debt Free Australia for a FREE debt assessment. Call us on our 24/7 debt advice line on 1800 462 767.

How is a Debt Agreement better than Bankruptcy?
 
There are several bankruptcy alternatives, one of which is a Debt Agreement. When deciding which option to go for you should consider the differences between the two and how they may help solve your financial troubles. A solution that works for one person may not work for another, so it is important for you to understand what each option entails before you make your decision.
 
Assets
Assets are a common reason why people choose a debt agreement over bankruptcy. If you own an asset that you don’t want to lose, such as a house or a car, then a debt agreement is probably better for you. Under a debt agreement, your assets will not be sold and they will be protected. The only way for you to lose them is if you do not pay any finance owing on them.
 
Stigma
There is a social stigma attached to bankruptcy and some people still find awkward or uncomfortable talking about it. The idea of being labelled as a bankrupt should not evoke shame, but it unfortunately does for some people. As a bankrupt, your status will also go on the National Personal Insolvency Index (NPII), a publicly available database, but it is important to know that you must pay a fee to search it so most people don’t unless they are lending money to you.
 
Travel
Although you can travel overseas whilst bankrupt, you cannot do this without first obtaining permission from your bankruptcy trustee. However, a debt agreement allows you to keep your passport and you can travel freely.
 
If you are exploring your personal debt solutions and would like to speak to a professional to learn more about them, then please contact Debt Free Australia. We offer a FREE initial consultation so that you can get unbiased, expert advice on which one is right for you. Our toll-free hotline operates 24/7 so you can call us at your own convenience on 1800 462 767.
 

How is Bankruptcy Different to the alternatives, such as such a Personal Insolvency Agreement?

The thought of being unable to pay your debts in full can be extremely stressful. For this reason, many people find it hard to see the difference between Bankruptcy and a Personal Insolvency Agreement.

Bankruptcy
Bankruptcy is an appropriate solution for those who are on a low to medium income and cannot repay their debts. This option gives people a fresh start. However, bankruptcy does come with consequences, some of which could last longer than the 3 year bankruptcy term. For example you could lose your assets and will have international overseas travel restrictions placed on you, among others.

If you are not eligible for an alternative to bankruptcy and you wish to file for bankruptcy, we see it as our role to firstly educate you about bankruptcy. Bankruptcy laws are very complicated and each case may have its own set of unique issues. We will go through the bankruptcy very thoroughly with you.

Bankruptcy Alternatives
Alternatives to bankruptcy include, a Personal Insolvency Agreement or a Debt Agreement. It allows you to pay back a percentage of your unsecured debts (based on your income and expenses). As such, it also does not come with the harsh consequences of bankruptcy. For example, your ability to travel overseas is unrestricted and your assets will be protected as long as you continue to pay the agreed amount into your personal insolvency agreement.

If you are not eligible for an alternative to bankruptcy and you wish to file for bankruptcy, we see it as our role to firstly educate you about bankruptcy. Bankruptcy laws are very complicated and each case may have its own set of unique issues. We will go through the bankruptcy very thoroughly with you.

To find out whether Bankruptcy or a Personal Insolvency Agreement is the best solution for you, speak to one of our experts at Debt Free Australia. We offer a FREE initial consultation so that you can get unbiased, expert advice on which one is right for you. Our toll-free hotline operates 24/7 so you can call us at your own convenience on 1800 462 767.

What You Should Know About ‘Buy Now, Pay Later’ Services

In an increasingly digitised world, shopping has become much more convenient with the introduction of ‘Buy Now, Pay Later’ services such as AfterPay, zipPay and OxiPay. Buy now pay later services are typically offered by online stores as a payment option to buy a product immediately, but delay your actual payment. It is then paid off in instalments over a certain period of time.

However, many people fall into the trap of overcommitting financially and buying items that are much more expensive than they’d usually purchase. With the holiday season over, you should review your finances to see what shape you are in. If you are concerned about the level of debt, Debt Free Australia offers a free debt assessment.

You still have to pay for your purchase
Buy now pay later is a behavioral technique that can trick you into believing that you are paying less than the actual amount for your purchase. Psychologically, paying smaller amounts can make you believe that the item is actually cheaper than it is. As such, consumers may buy and spend more than they normally would, and falling into the trap of overcommitting financially and finding themselves in debt.

Interest-free doesn’t mean ‘free of fees’
Despite often being advertised as ‘interest free’, if you don’t make your repayments on time, the fees can accumulate to large sums. There are typically monthly account-keeping fees charged so that you can use this service, and then payment processing fees that may occur for each transaction, on top of your set repayment. Furthermore, if you miss a payment, you can be charged late fees. It all adds up incrementally and can become very overwhelming.

If you would like to learn more about your options to deal with unmanageable debt, contact our friendly and professional debt advisors at Debt Free Australia for a FREE debt assessment. Call us on our 24/7 debt advice line on 1800 462 767.

Can I Travel Overseas Whilst Bankrupt?

There are many misconceptions around overseas travel as a bankrupt. For example, some people think you cannot travel overseas at all. Others say that you cannot travel overseas unless it is work-related. As a bankrupt, there are many restrictions that you should be aware of.

One of these is knowing that yes, you can travel overseas whilst bankrupt without the permission from your trustee in bankruptcy. If you have complied with your obligations as bankrupt, your trustee should allow you to travel overseas even if it is for a holiday.

Travelling overseas without your trustee’s permission will have consequences.

Before granting permission, your bankruptcy trustee will likely consider the following:

Have you complied with your obligations as bankrupt, such as paying any income contributions;
The itinerary for your trip and whether you have purchased a return ticket;
Who paid for the trip

In some cases your Trustee may place some conditions on your travel, such as paying any outstanding compulsory income contributions and a bond prior to travelling.

Where the bankruptcy is administered by the Official Trustee (AFSA), a fee of $150 will also be payable before permission to travel will be granted.

If you would like to learn more about your options to deal with unmanageable debt, contact our friendly and professional debt advisors at Debt Free Australia for a FREE debt assessment. Call us on our 24/7 debt advice line on 1800 462 767.

Are you currently in debt and worried about what debt collectors can do to you? We’ve put together a list to show you what they can do to collect their debts.

What is a Debt Collector?
 A debt collector is usually an agent who acts on behalf of a creditor (a person to whom you owe money). Debt collectors’ activities are limited by the Fair Debt Collections Practices Act.

Why Am I Being Contacted By A Debt Collector?
 A debt collector may contact you by phone, letter, email, social media or by visiting you in person. This can be for one or more of the following reasons:

• Update you with information regarding an overdue account;
• Ask for payment on an unpaid debt;
• Explain the consequences of non-payment;
• Offer alternative payment arrangements, or alter existing arrangements in order to settle an unpaid debt; and
• Enforce a summons, statement of claim or liquidated claim by repossessing assets (if they are in right to do so).

What Can’t A Debt Collector Do?
It is against the law for debt collectors to behave in the following ways:

• Threatening, trespassing or intimidating: This includes: threatening physical force; damaging property; blocking access to your property; remaining on your property without a court order when asked to leave;
• Harassment or verbal abuse: This includes contacting you more than necessary or at unreasonable times and using unprofessional language or tone; or
• Using deceptive conduct to make false or misleading statements: This includes making false statements about the money you owe or what will happen if the debt is not paid. They cannot send letters demanding payment that are designed to look like court documents; or pretend to be or to act on behalf of a solicitor, court or government body.

If you would like to learn more about your options to deal with unmanageable debt, contact our friendly and professional debt advisors at Debt Free Australia for a FREE debt assessment.  Call us on our 24/7 debt advice line on 1800 462 767.

A Debt Agreement is a legally binding agreement that can be arranged between a person with unmanageable debts with their creditors if the person can no longer afford to repay their debts. Essentially, it is an arrangement a person makes with their creditors to pay an agreed amount over a period of time, usually ranging from 3 to 5 years. In most cases, debts can be settled for less than what is owed and the balance will be legally written off (subject to creditor acceptance).

A debt agreement is a flexible alternative to bankruptcy that provides relief when individuals are struggling with unmanageable debt. Debt Free Australia has a track record in helping Australians successfully settling their unaffordable debts through a debt agreement. However, many people still believe certain misconceptions about this legal arrangement.

Here are 2 popular myths and why they are not true.

• Debt agreements destroy credit ratings forever

 As of March 2014, changes to the Privacy Act limited the length of time information can be recorded on a credit file. Correct at the date of this publication, your name and other details will be listed on your credit file for 5 years from the date of the agreement or 2 years after the end date, depending on whichever date is later.

• Debt agreements are only for financial failures

There is a misconception that individuals who enter into debt agreements are financial failures. However, many people who incur debt problems may have been affected by incidents out of their control, including unexpected medical bills, death of a family member, natural disasters, etc. Debt agreements give people an opportunity to make a sensible choice, rather than allowing their already deteriorating financial situation spiral out of control.

Financial problems can strike anyone, anytime.

A debt agreement is one of the various solutions offered here at Debt Free Australia. If you are exploring your personal debt solutions and would like to speak to a professional to learn more about them, then please contact our friendly debt advisors at DFA. We offer a FREE initial consultation so that you can get unbiased, expert advice on which one is right for you. Our toll-free hotline operates 24/7 so you can call us at your own convenience on 1800 462 767.

We know that bankruptcy is not going to be your first choice, but it is important to know that if your circumstances change, you may be able to end your bankruptcy early. We explore the different ways in which you may be able to end your bankruptcy early.

1. A Formal Proposal
The Bankruptcy Act envisages that people may want to end their bankruptcy early and Section 73 of the Act sets out the procedures to follow if you wish to put a proposal to your creditors to end your bankruptcy early. First of all, you need to offer your creditors more than what they would receive if your bankruptcy continued for the usual period of time. So you will need to understand what assets your Trustee in Bankruptcy will realise during your bankruptcy and offer more than this amount. This will provide your creditors with an incentive to accept your proposal rather than allowing your bankruptcy to continue for the usual period. Once you have worked this out, you will need to put your proposal in writing to your Bankruptcy Trustee with details of how your proposal will be funded (because you can’t use your own funds as they would have already vested with your trustee). Your Bankruptcy Trustee will then prepare a report to your creditors and include a recommendation. In order for your proposal to be accepted you will need to receive enough positive votes to pass the voting threshold. The voting threshold is 75% of the value of all debts and more than 50% of the number of your creditors. This vote will be dealt with by your Bankruptcy Trustee at a meeting of creditors. If you receive enough votes your bankruptcy will come to an end with immediate effect. This can be a very cost effective way of bringing your bankruptcy to an end early.

2. A Court Application
You may be eligible to apply to court for your bankruptcy to be annulled. You will need to first obtain legal advice as to whether you have grounds for such an application.

3. Payment of your debts in full
This option may be attractive if you win the lottery or you inherit enough money to pay your debts in full, including all costs and expenses your Trustee in Bankruptcy has incurred. Alternatively a family member or close friend may provide the required funds.

If you’re thinking about bankruptcy, it’s important to be well informed of all of your options including bringing your bankruptcy to an end early. At Debt Free Australia we have an in-house Bankruptcy Trustee who can advise you on all available options. If you want to explore bankruptcy further please call our friendly and professional debt consultants on 1800 462 767.

Do you feel like your debt is growing out of control? At Debt Free Australia we care about our clients. If you have reached a stage where there is no escape from the depths of debt, contact us now!

To help save money and minimise the risks of your debt getting out of control, here are our top 3 tips for 2018:

1. Record your expenses
The first step to saving money is determining how much you spend and what it’s spent on. Keep a record of all expenses even small expenditure like takeaway coffees, newspapers, magazines and breakfast or lunch etc. Once you have this information, organize the expenses into categories such as food, petrol, essential bills (like utilities) and leisure. Looking at your credit card or bank statements can be a good starting point. If you use online banking, you may be able to filter your statements to easily search for expense items.

2. Create a Budget
Once you have seen how you have been spending your money, you can then make an assessment if any expenses can be reduced or cut all together. Once you have documented your desired expenditure, this will become your budget. You should then compare your actual expenditure against your budget every week, so you can see if you have been sticking to your budget. After you have gone over your actual expenditure and compared it to your budget, you can then make an assessment if you need to make any changes to your budget.

3. Set goals to save for and determine your priorities
Setting goals is one of the best ways to save money. Prioritizing your goals can give you a clear idea of where to start. Start by thinking of what you need to save for most, then figure out how long it might take you to save for it. Once you achieved your goal, make sure you reward yourself.

If you have tried the above tips and you are still struggling with debt repayments, then you will most likely need professional debt advice. Here at Debt Free Australia we have fully qualified accountants and debt specialists ready to help you. Call us at Debt Free Australia today on 1800 462 767.