6 Tips for Managing Credit Card Debt

People’s credit card debt balances and the reasons why they borrow money vary widely. In Australia, credit card debt is among the most prevalent. Almost half of all Australian adults have credit card debt. The interest rates charged on credit cards vary greatly amongst banks as well. Some credit cards have interest rates as high as 22%, while others have rates as low as 5%. Some banks also offer interest-free credit cards, which shows that lenders are starting to see the problems with paying interest on unsecured debt and how often it is used.

What happens if credit card debt is not paid in Australia?

 Your credit rating may be impacted if you fail to pay off your credit card debt. Debt collectors or banks will keep calling and trying to get their money back if the debt is not paid back. These calls can make you feel even more overburdened because they are relentless. Your mental and emotional health may be seriously affected if you cannot devise a plan. Getting help or assistance as soon as possible is the best solution for situations like these.

Tips for Managing Credit Card Debt

• Minimise Unnecessary Purchases: Stop using your credit card for everything but necessary purchases. As you work on your plan, try to avoid using your credit card and instead pay with cash wherever possible.

• List down your expenses: Although it may seem simple, start by jotting down how many credit cards you are using and the interest rate you are paying each. Then make a list of every dollar spent (debts and expenses), including money for food, rent or a mortgage, credit cards, power, phone, and transportation. List all of your monthly revenue, including salaries and other compensation.

• Lower your credit Limit: Request your credit provider to lower your credit limit to minimise the temptation to use your card excessively. You can do this online by calling or stopping by a branch. The typical wait time is one to two business days. If you need to boost your limit to buy anything special, try to pay it off as soon as possible. Then decrease your limit once more to a manageable level.

• Pay Minimum Credit: If you can’t pay a card off, try to pay more than the minimum every month to pay off the balance faster and avoid paying interest. Setting a direct debit to pay a certain amount on your payday can be beneficial. Additionally, to make it simpler for you to manage your finances, once a card has been paid off, you should delete the account and strive toward having only one card.

• Transfer Credit: If you think your interest rate is too high, you might want to move any outstanding debt to a credit card with a lower rate or combine it with an existing personal loan or mortgage, which sometimes have lower fees and interest rates.

• Debt Consolidation: Consolidating debt as one payment is an additional choice. You can use a single loan to pay your debt off and eliminate debt. Both debt consolidation loans and balance transfer credit cards are options for achieving this.

Debt Free Australia will give you unbiased advice tailored to your debt situation. Please contact us if you are looking into personal credit card or debt solutions and want to speak to an expert. Our toll-free hotline is open around-the-clock. Call us whenever it is most convenient at 1800 462 767.

Experiencing personal financial difficulties and need some debt relief? Debt Free Australia has got you covered. We offer a range of solutions that will help you get debt relief so that you can prepare for a better financial future.

Debt Relief Solution 1: Debt Agreement

A Debt Agreement refers to an arrangement established between the debtor and his or her creditors. It is a formal settlement whereby the debtor agrees to pay a proposed sum to creditors over a certain period of time. It usually runs from 3 to 5 years.
The value of a Debt Agreement comes in its ability to give the debtor some breathing space from creditors hassling them to pay their obligations, providing some much-needed debt relief. It enables them to work out an agreement in which all parties are satisfied. Debtors usually pay less than what is owed, and the whole balance is written off.
In order to be eligible to enter into a Debt Agreement, your finances must not surpass the requirements established.

Debt Relief Solution 2: Personal Insolvency Agreement

A Personal Insolvency Agreement is similar to a Debt Agreement in the sense that an arrangement is set up between a debtor and his or her creditors. It provides debt relief to people because it enables the debtor to pay back their fees without creditors constantly harassing them.
If your finances exceed the thresholds for a Debt Agreement, then you are no longer eligible to enter into a Debt Agreement, and must enter into Personal Insolvency Agreement.

Debt Relief Solution 3: Bankruptcy

Another debt relief solution is Bankruptcy. However, there are serious consequences to Bankruptcy and so it must only be considered as a last resort.
Bankruptcy lasts for 3 years after your Bankruptcy application form, Statement of Affairs, is lodged and accepted by the Australian Financial Security Authority (AFSA). Most personal assets will be sold in Bankruptcy, with only a few exceptions such as most essential household goods and motor vehicles and tools of trade under a certain amount.

If you are looking for advice personally tailored to your situation about any debt relief solutions, then please contact Debt Free Australia. DFA are passionate about helping Australians get out of debt and prepare for a better financial future. Please contact us on our 24/7 toll-free hotline on 1800 462 767 to speak to one of our friendly and professional debt relief consultants.

A Guide to Debt Consolidation

If you have multiple debts to pay, your best option could be debt consolidation. Debt consolidation helps to put all of your debts into one affordable single payment. If you are interested in debt consolidation, here is how to proceed with this process.

There are many companies out there that offer options for your debt consolidation, but you have to choose the right company. If the company is not a licensed debt agreement administrator you should proceed with extreme caution.

Here at Debt Free Australia we are a licensed debt agreement administrator and offer all services for struggling Australians.

Debt consolidation typically involves renegotiating and bundling up all of your unsecured debts into one affordable payment. Debts which can be consolidated include credit cards, personal loans and other personal debts.

Before you proceed with debt consolidation, seek counsel from professionals who have experience in the industry. For more information on debt consolidation, Debt Free Australia is available and ready to assist you with your concerns. Contact us on 1800 462 767.

If you have unmanageable debt and need to settle it with an insolvency arrangement, you need the assistance of a qualified professional. To begin with, you will want someone with plenty of experience dealing with creditors and a background in accounting. In addition, there are some minimum qualifications that need to be held in order for a company to be able to administer a formal debt solution for you.

Debt Agreement
If you wish to enter into a Debt Agreement, you will need the services of a Registered Debt Agreement Administrator. In order to become a Debt Agreement Administrator one needs to hold, at the bare minimum, a Certificate IV in Accounting. They must apply with ITSA for the title and undergo a police check, and show that they are capable of carrying out such duties as:

• Ensuring that debt agreement proposal documents provided to ITSA are correct
• Responding in a timely manner to requests from creditors for information
• Ensuring creditors are informed about defaults
• Paying out all monies received from a debtor under an agreement
• Keeping thorough accounts, books and records

Personal Insolvency Agreement or Bankruptcy
Both a Personal Insolvency Agreement and Bankruptcy require a Registered Trustee to administer them. The process of becoming a Registered Trustee is decidedly more difficult than that of becoming a Debt Agreement Administrator. One must have tertiary qualifications in both accounting and commercial law and submit an application that contains two referee reports confirming their knowledge and abilities, as well as have relevant employment history and a demonstrated ability to be able to perform the functions of a Registered Trustee. This application is lodged with the Inspector-General in Bankruptcy, who then convenes a committee to consider the application.

If you require a formal debt solution it is extremely beneficial for you to know what sort of qualifications the company heads hold, because that will determine exactly what they are able to do to help you. Due to the difficult process of becoming a Registered Trustee, many companies will only have a Debt Agreement Administrator. What this means for you is that if you need a Personal Insolvency Agreement or a Bankruptcy, some companies might actually charge you for doing a small amount of work and then pass you over to another company who has a Registered Trustee on site. Some companies may even try to push you towards a solution that is not in your best interest because they would rather retain your business.

Here at Debt Free Australia we have the privilege of having both a Debt Agreement Administrator and Registered Trustee running the company, which means that no matter what your individual circumstances and needs, we will be able to help you. And we will do so from beginning to end, without passing you over from one company to another. For genuinely impartial advice on all of your formal debt solution options, call us today on 1800 462 767.

The key to a successful budget is making sure that it is realistic. In the long run it will also help you save money because before you buy something you should first check to see if you have allocated funds in the budget for the purchase. If you apply this discipline, you will achieve financial success in the long run.

The key to a successful budget is making sure that it is realistic.

Here are 4 key tips on how to create a realistic budget.

1. Calculate how much money you spend each month
Be honest and don’t try to cut corners and say that you spend less than you actually do as this will be detrimental to your ability to create (and stick) to a budget.

Some months you will have more bills than others, but try and calculate a reasonable average. And for good measure, increase this amount by 10-15 per cent. That way, if you have unexpected bills thrown your way, you are covered.

Also, if you know you have car rego or insurances due, try and allocate enough money to cover those type of expenses which will become payable every year.

2. Calculate how much money you earn
Now it is time to determine how much income you earn each month.

This number may include but is not limited to your salary or any investment money which you might earn (like interest or dividend on shares).

3. Determine whether you have living above or under your means
You can answer this by subtracting your monthly expenses from your income.

If you have a negative figure after subtracting your monthly expenses from your income, then you will need to see what areas you need to reduce your planned spending. If you can’t reduce any spending, then you will need to get a 2^nd job on the weekend.

Just remember, when you set yourself a budget, make sure that it is reasonable and is achievable. There is no point preparing a budget which is not realistic.

If you need to cut some fat out of your budget, you might need to shop around for some better deals on:

• electricity or mobile phone plans
• credit cards which charge less interest
• pay by the month insurance

4. Track your spending
Once you have set your budget, it is important that you check your spending against your budget every month.

If you need professional help with setting a budget or a plan to get out of debt, call Debt Free Australia on 1800 462 767.

Debt Relief: Debt Agreement vs. Bankruptcy

When you’re drowning in debt, you have a few relief options. Two of the most common options are declaring bankruptcy or entering a debt agreement.

But which solution is right for you? Today, we compare a debt agreement and bankruptcy.

Debt Agreement

A personal debt agreement is an agreement between you and your creditors. It is a flexible way to pay off debt without filing for bankruptcy.

You can negotiate to pay an affordable percentage of your combined debt. Instead of paying to your creditors, you pay to your debt agreement administrator. Additionally, the interest will be frozen.

After you complete your payments, creditors can’t collect the rest of the money you owe. If you don’t qualify to file for bankruptcy, a debt agreement is the best solution.

However, there are limits to debt agreements. Depending on your income and amount of debt, you may not be eligible for a debt agreement.

Bankruptcy

Filing bankruptcy may seem like the easier solution to your financial woes, but it may not be suitable for you. Bankruptcy does come with certain restrictions, and your assets may be seized.

When you declare bankruptcy, you will have a trustee manage your debts. They will own your property and assets and be in control of how it is distributed to creditors.

If you have assets you want to hold on to, bankruptcy may not be the right solution for you. Things like jewellery, money in financial institutions, stocks, shares, and other assets will be transferred to your trustee.

Declaring bankruptcy also has long-term effects. Bankruptcy will be visible on your credit report for 5 years but will stay on the National Personal Insolvency Index forever.

Which is Best For You?

Bankruptcy and debt agreement help relieve some of the financial burdens, but they come with their own positives and caveats.

Debt agreements allow you to pay off your debt while keeping your assets. However, a debt agreement only applies to unsecured debts. Also, there are limitations on how much debt you can claim.

Bankruptcy makes paying down debt manageable, but it requires you to relinquish your assets. It also prevents you from operating a business and travelling overseas without permission of your trustee.

Your financial situation is unique, and it calls for the perfect solution. Our professionals are here to help.

To speak with an experienced debt consultant about declaring bankruptcy or arranging a debt agreement, contact us.

While you may not be the only Australian struggling with personal debt issues, every person’s situation is different and so it is important to find the debt solution that is right for your individual circumstance.

However, finding the best option is easier said than done. There are many personal debt solutions available that can make this process very confusing and frustrating. This is why it is crucial that you enlist the help of an experienced and knowledgeable debt administrator who can assist you in determining the best option.

How to choose the best debt solution for your situation

There are many factors that you need to consider when choosing a debt solution.
You need to take into account:

1. How long the implications will last.

Every solution will last for a certain amount of time. For example, if you file for bankruptcy, you will be considered bankrupt for 3 years and 1 day. The time for a Debt Agreement can be between 3 to 5 years.

2. How it will affect your credit rating.

Your credit rating will be affected once you enter most debt solutions. However, each solution will have different effects on your credit file. Those who enter into a Debt Agreement or a Personal Insolvency Agreement will have a default placed on their credit file for a minimum of 5 years. The default for Bankruptcy is also 5 years.

3. Will your travelling be restricted?

There are certain debt solutions which will restrict your ability to freely travel, while there are others that won’t. Filing for bankruptcy will limit your ability to travel overseas without the prior written permission from your Trustee in Bankruptcy. With a Debt Agreement (for example) no written permission is required.

4. How it will affect your employment.

In some cases, some debt solutions will affect your current employment or ability to apply for other jobs. For example, if you have filed for bankruptcy, you will not be eligible to be a Gaming room employee, Justice of the Peace, Police Officer and more. This is why it is vital that you really research the full implications of each solution to lessen the effect on your future.

5. Which of your assets will be protected?

Depending on which debt solution you choose, some of your assets may be protected while some may not be. If you file for bankruptcy, the Bankruptcy Act allows you to keep certain items such as most ordinary household goods.

At Debt Free Australia, we understand that the process of finding the right solution is difficult. This is why it is important to enlist the assistance of highly trained consultants who can take you through all your options and help you determine what is the best option for you. The consultants at Debt Free Australia are experienced, professional and passionate about helping Australians recover from debt troubles to lead a better financial afterlife.

To find out more about how we can help you, call us today on our toll-free advice line on 1800 462 767.

People find themselves in financial trouble for all kinds of reasons. In times of financial distress, it helps to know one’s options.
Debt Free Australia (DFA) has put together a list of the formal debt solution options available to you:

Debt Agreement

The first option for those seeking debt help is aDebt Agreement. A Debt Agreement is an arrangement between a debtor and his/her creditors that allows them to repay an agreed amount over a certain period of time. In many cases, debtors can settle their debts for less than what was originally owed. To learn more about Debt Agreements, click here.

Personal Insolvency Agreement (PIA)

A PIA is another legally binding agreement available for those seeking debt help. It is a similar arrangement to a Debt Agreement, but is suited to those with higher levels of debt and/or income. Only people who are genuinely struggling with their debt can enter into a PIA or DA. To learn more about PIAs, click here.

Bankruptcy

Bankruptcy is an appropriate solution for debtors who have reached the point of no return. Although it has more serious consequences than the other options, it is a legitimate way for you to get out of debt, start fresh and move on with your life. To learn more about bankruptcy, click here.
DFA’s Registered Bankruptcy Trustees have years of experience in helping Australians along their bankruptcy journey. To speak to a Registered Trustee today, call 1800 462 767.

Don’t let it spiral out of control

The golden rule of dealing with debt is to act immediately after the warning signs appear. The worst thing you can do is brush it under the carpet and let your debt snowball out of control.

Call our free debt help hotline today

If you need professional debt help, contact DFA today.
We’ve helped thousands of Australians with their debt problems, so you can trust that we can help you too.
Our licensed financial advisers offer impartial and confidential advice for anyone looking for help with their debt. Call one of our insolvency experts now, free of charge, on 1800 462 767.

All About Debt Agreements

Debt agreements are unique but comparable to personal insolvency agreements. If you are in a financial difficulty and you can’t pay your debts, you might consider a debt agreement. There are some great reasons to apply for a debt agreement and some details you need to know before proceeding.

With a debt agreement, there are different steps to follow. The debtor must file a debt agreement proposal (DAP) with the Australian Financial Security Authority (AFSA). The DAP provides creditors with a debt repayment plan which usually runs over 3 years.

The great news about a debt agreement is that the debtor can propose how much to repay based on affordability. It will of course be subject to creditor approval.

If payments are made on time, as agreed, the unpaid debt will be forgiven once the agreement is fulfilled.

A debt agreement is more flexible and less intrusive than bankruptcy and is suited to people who want to protect their house or other assets from being sold.

For more information and assistance with debt agreements, Debt Free Australia can assist you. Contact us at 1800 462 767 or feel free to visit our website. We look forward to helping you with your debt repayment plans and answering your questions.

If you’ve ever experienced overwhelming debt, you know firsthand how difficult it is to see through to the other side. Your finances consume your thoughts and your down-time is spent worrying. You feel trapped by your debt, and more often than not you are always thinking about the worst-case scenario.

When you seek the help of an impartial, experienced professional at Debt Free Australia, you will receive a financial assessment specific to your situation. Our debt advisors will consider all of the options available to you and explain in detail how each is likely to affect you, covering both the good and the bad. Our professionals will open your eyes to a world of possibilities that you have likely not considered.

Debt Free Australia (DFA), a team of experienced, licensed debt advisors, offers 24 hour financial advice that is completely free and confidential. What many who are struggling with debt fail to think about, DFA takes into consideration. Factors like how affordable a solution really is, how long it will last, how it will affect your credit rating, if it will protect your assets, and many more. By considering all of these aspects, including your own personal needs and wants, DFA is confident that they can provide you with the best possible solution for your financial situation.

Once you have chosen the right debt solution, you won’t be left alone. DFA is fully licensed to offer you services in bankruptcy, Personal Insolvency Agreements and Debt Agreements, allowing them to work with you from beginning to end. By choosing DFA, you receive advice and service in the one place.

If you need further reason to seek professional help, the many testimonials of Australians who were once in your shoes should be encouragement enough. Many of DFA’s clients believed that their only option for managing their debts was to declare bankruptcy. After seeking the advice of an expert, many of these clients were able to resolve their issues by refinancing their loans, or entering into a three- to five-year Debt Agreement or Personal Insolvency Agreement, putting them on track to become debt free. For those who did indeed need to file for bankruptcy, DFA assisted them throughout the process, making it as seamless as possible.

If you are struggling with your finances and feeling the weight of your debts holding you down, seeking a professional’s opinion is in your best interests. DFA will offer you personalised options, making your search for a debt solution as easy as possible for you. If you are unable to imagine a world where you can live debt free, call DFA today at 1800 462 767 for free advice and more information on our services.