Understanding Personal Debt Agreements

Entering a personal debt agreement can be beneficial to your financial situation. There are many pros, as well as cons, to agreeing to the terms of this document. Today, we will talk about what personal debt agreements are, how they work, and other essential details you need to know to help you if you choose to create a personal debt agreement.

What is a Personal Debt Agreement? 

A personal debt agreement is a legally binding agreement between you and the creditors you owe. In these situations, you agree to terms that you have discussed with your creditors. You may negotiate specific terms, pay a percentage of your debt over time, or make repayments to the debt agreement administrator rather than the creditor.

Can the Creditor Request All of the Money? 

If you negotiate on a specific amount of debt paid back, the creditor cannot request additional funds beyond what has been specified in the debt agreement. There are limitations based on your income and the debt owed.

What Do I Need to Do Beforehand?

Before signing a debt agreement or discussing this option, you should consult with experts. Figure out your options, and be sure that a personal debt agreement would be the right decision for you and your family. You should also fully understand the consequences before signing the final document.

Let Debt Free Australia Assist You

For more information about personal debt agreements and how they could benefit your situation, Debt Free Australia is here to help. To contact us regarding our services, contact us either here or through our toll-free hotline at 1800 676 598.

How to Manage Debt

Having debt can be beneficial if you are able to manage it effectively. This is because not all debts are the same – there is ‘good debt’ and ‘bad debt’. For instance, if you have taken on a loan to invest in stocks, it is usually considered ‘good debt’. If you have borrowed money to pay off your credit card loan, that would be regarded as ‘bad debt’ since the debt will not yield any value over time or add to your wealth. In the following article, we offer some tips to help you manage your debt so you can begin your path towards a brighter financial future.

Tips to Manage Debts

1. Make a budget

Make a budget to see how much of your earnings are going to servicing debt and how much is spent on interest and processing fees.

2. Assess what you owe, earn and spend

If you have more cash outflows than inflows, you need to re-evaluate your finances to see where you can cut down on non-essentials and pay off your debt quicker.

3. Group your debts

Having multiple debts means paying multiple fees and interest charges, which push up your debt. Try to group and renegotiate your debt to pay a single and lower interest rate.

4. Pay as much as you can on time

When repaying debt, you usually get an option of how much you have to pay. Try to pay as much as you can, rather than the minimum amount. Check your lender to see if they allow extra repayments and make additional payments to let your debt decrease quicker and save on interest charges.

5. Have a savings plan

Whilst it is necessary to repay debt, you should also have a rainy-day fund ready for any accident or mishap that could affect your income or debt repayment capacity.

6. Reach out to Debt Free Australia for help

If you are facing problems in repaying your debt, reach out to us to discuss your situation.

If you need professional debt help, contact Debt Free Australia 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 so call us today, free of charge, on 1800 676 598.

The JobKeeper program provides a wage subsidy to workers up to $1,500 per fortnight to the end of September. Due to the surge of cases in Victoria and Melbourne city lockdown, the program has been extended to the 28th March 2021 with new pay rates. Below explores some advantages and disadvantages of applying (or reapplying) for JobKeeper:

Advantages

The JobKeeper program has been a lifesaver for many businesses as it offers both a financial and business boost. By avoiding redundancies you are able to keep people employed during harsh economic times which will reduce the cost of rehiring staff later down the track and allow you to retain talent. Furthermore, it offers a long term advantage by building employee loyalty and a stronger workplace culture where you have put their best interest at heart.

Disadvantages

A key disadvantage from the program is the potential of making future redundancies more costly as the employees will continue to accrue entitlements and annual leave. Where they are let go, these entitlements will have to be paid out from cash reserves or from non-existent profits. Something else to consider is the potential cash flow issues that may also arise as you will need to pay staff first before receiving the JobKeeper subsidy in arrears.

Overall, you should be aware of the advantages and disadvantages of the program before making the decision. If your business is struggling financially or you’re considering reapplying for JobKeeper and would like to learn more, please talk to Debt Free Australia for free and confidential advice on our 24/7 toll-free hotline on 1800 676 598.

With 2020 filled with many uncertainties, businesses worldwide have been forced to adapt to a new normal. It is crucial for your business to take advantage of these emerging trends as early as possible. Below are 4 business trends to watch out for:

1. Remote work is the new normal

Increasingly, businesses are embracing working from home in the long term. Businesses are noticing various benefits from this arrangement, such as reducing office space and not limiting hires based on geographic proximity.

2. Word of mouth and user reviews

With the majority of purchases now made online, consumers are turning towards purchases based on word of mouth (on their social media platforms) and user reviews. We will see more businesses investing in obtaining more user reviews for their products and services.

3. Changes in customer service

The disruption within the customer service industry has only accelerated the emerging trends. Businesses are starting to look into new ways to provide personalised services and experiences, through the use of tailored digital marketing and social media, compared to more traditional means such as phone and fax, streamlining the whole customer experience.

4. Big data

Having a big data strategy is crucial to ensuring a competitive edge. Ensuring you make the most out of your available data about customers and clients will dictate your marketing and business decisions.

Debt Free Australia is passionate about helping individuals and businesses get out of debt and prepare for a better financial future. If your business is struggling to adapt to the new normal or is looking for a fresh start please get in touch with our highly-trained advisors. Please call us on our 24/7 toll-free hotline on 1800 676 598 to speak to one of our friendly and professional debt relief consultants.

The COVID-19 outbreak has impacted and continues to impact businesses and individuals in a multitude of ways. With unclear economic conditions and the full duration of the pandemic unknown, it has made planning harder than ever. Below are some starting points to consider when looking at business recovery or response:

1. Gaining a clear view of your starting point

It is important to have a clear view of the company’s starting position. The financial plan rolled out for this year and the next 18 months should consider advice from the financial planning team and experts that take into consideration current market and financial trends, and acknowledge changes as a result of the pandemic.

2. Identifying key threats and opportunities

The pandemic has drastically disrupted how businesses and the market operate. The long-lasting and unpredictable impact following the pandemic means businesses need to be prepared for any new opportunities and risks to ensure its long term survival.

3. Developing a range of scenarios

Developing three or four scenarios for how the pandemic might impact your business, from best to the worst case should be explored. Rather than trying to be overly precise, it is more important to use conservative estimates and assumptions.

4. Establishing a direction to action

You will need to decide which scenarios make the most sense to pursue and create a detailed financial plan around them. This will allow you to make a more informed recovery or response action plan. This can range from focusing on restoring business operations as quickly as possible to shaping a whole new business.

Debt Free Australia is passionate about helping individuals and businesses get out of debt and prepare for a better financial future. Our highly-trained consultants can help you carefully consider all of your debt solution options. Please call us on our 24/7 toll-free hotline on 1800 676 598 to speak to one of our friendly and professional debt relief consultants.

You may be worried about what will happen to your family home when you declare bankruptcy. A Bankrupt’s home is not a protected asset under the Bankruptcy Act, meaning that a bankrupt’s interest in any property vests with the Bankruptcy Trustee. This means that the Bankruptcy Trustee can take full control of your interest in the property. However, the family home may not always be sold as it depends on the individual’s circumstances.

For example, the property can be jointly owned (i.e. the bankrupt owns 50% and the non-bankrupt spouse owns the other 50% interest), where the Bankruptcy Trustee will now deal with the 50% interest owned by the bankrupt. It is commonplace for the Bankruptcy Trustee to sell the bankrupt’s interest to the non-bankrupt spouse or another family member as it avoids unnecessary stress selling the family home and potential selling costs.

Another scenario is if your family home was purchased using protected money (e.g. superannuation funds, insurance or workers compensation payments) then it cannot be sold by a trustee to pay off debts.

Debt Free Australia are passionate about helping Australians get out of debt and prepare for a better financial future. If you are considering bankruptcy and would like to know more about the impact it may have on your family home then please contact us on our 24/7, toll-free hotline on 1800 676 598.

At Debt Free Australia, we are passionate about helping Australians get out of debt and onto a financially secure future. We have been in operation since 2006 and during this time, we have helped thousands of Australians with their financial struggles and we know we can help you too.

Here are some other reasons why you can trust DFA with your debt problems.
 
1. We are fully licensed and insured as required by Australian Securities and Securities Commission
This means we are fully qualified to take on your case from the first moment you speak to us until the very end.
 
2. Our CEO is a fully qualified Chartered Accountant and a Registered Trustee in Bankruptcy
We are led by a licenced and registered insolvency practitioner so you know that you will be receiving the best insolvency services possible.
 
3. We offer a full suite of products
At DFA, we do not believe in a one-size-fits-all approach. Every person’s situation is different and so would require a solution that addresses their specific needs. This is why DFA offers a range of products so that you can choose the one the best suits you.

The personal debt solutions that DFA provides are Bankruptcy (form filling service), Bankruptcy (Acting as your trustee), Debt Agreement and Personal Insolvency Agreement.
 
4. We offer FREE professional advice
We understand that it can be daunting making the first step to address your debts and we also know that it can be a stressful time for you.
At DFA, we want to reduce your financial burden and worry, not add to it, which is why we offer FREE expert advice to everyone who calls us.

We want to firstly make sure that we can assist you before we charge a fee, and we also want to help advise you on your best next step of action. Our phone call can also be confidential if you wish to remain anonymous.

If you would like to learn more about how DFA can assist you, then please contact us on our 24/7, toll-free hotline on 1800 676 598.

With the impact of COVID-19 is felt on the economy and individuals, the government has placed temporary relief measures, effective from 25 March 2020 to 25 September 2020, to lessen the impact on individuals and businesses.

The Government has made a number of changes to the personal insolvency system, including:

• • Temporarily increasing the threshold for the minimum amount of debt required for a creditor to initiative bankruptcy proceedings from $5,000 to $20,000;
  • Time for debtor to respond to a bankruptcy notice has increased from 21 days to 6 months;

and

• The period of protection a debtor receives after lodging a declaration of intention to present a detector’s petition is extended from 21 days to 6 months.

In such financially uncertain times and with the recent changes to bankruptcy laws, you may find it difficult to navigate the personal insolvency landscape. Debt Free Australia is committed to reducing the impact of COVID-19 and will assist you find the debt solution that meets your individual needs. Where many businesses operating online may only offer one or two debt solutions, we offer the full suite of professional debt solutions ranging from personal insolvency agreements to filing for bankruptcy (for more information on offerings please click here). We will take the time to explain each option so you can select the one that best suits your needs to ensure you find relief during times of crisis.

Here at Debt Free Australia we always try to find the least severe financial solution before we consider bankruptcy. In the case where you find bankruptcy to be your best option, we offer a service where we will assist you to complete the bankruptcy forms for a once off fee starting from $600 as we recognise completely the forms by yourself can be overwhelming and that money may be tight right now.

Debt Free Australia 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 676 598 to speak to one of our friendly and professional debt relief consultants.

Debt consolidation is when you consolidate (i.e. combine) all your debts, such as existing loans, credit card balances and borrowings into a single loan. This means you will only need to make one repayment, one interest and one set of loan fees.

What are some benefits of debt consolidation?

• To secure a lower interest rate. If you have credit cards the interest rates are generally higher than the rates for debt consolidation; and
• To reduce the number of payments you have to manage each month. By combining them all together it saves you the hassle of multiple organising payments each month.
• It can help you boost your credit rating. Your credit rating is impacted by various factors. If you are unable to pay your credit cards on time it can negatively affect your payment history which has a large stake in your credit rating.

It is important that before you apply for a debt consolidation loan you compare the interest rates of your current debts and see how they compare. Consolidating debt with a personal loan will only benefit you if the new loan has favourable terms and a lower interest rate than your current debt. Before you enter the new loan it is crucial that you carefully assess if you can afford the loan to avoid putting yourself into further debt.

If you would like more information about debt consolidation or are looking for alternative options then give us a call on 1800 676 598. Our personal debt advisors help you find a debt solution appropriate to suit your needs.

There are many alternatives to bankruptcy, with a Debt Agreement being one of them. A Debt Agreement is a legally binding agreement you can reach with your creditors if you can no longer afford to repay the debt. The outlines of this agreement can be found under Part IX of the Bankruptcy Act 1966 in Australia.

Not everyone can apply for a Debt Agreement. Only people who have been struggling with debt for some time can enter into a Debt Agreement. A Debt Agreement is essentially an arrangement with your creditors to pay an agreed amount over a period of time (usually this ranges from 3 to 5 years). In most cases you can settle your debts for less than what is owed and the balance will be legally written off.

• How do I know if I am eligible for a debt agreement?
• You are able to make a proposal for a Debt Agreement if you meet the following criteria:
• You are unable to repay debts when they fall due (insolvency testing)
• You haven’t been bankrupt, filed for a debt agreement or personal insolvency agreement for the last ten years
• Your estimated after-tax income for the next 12 months to be less than the set amount

If you are exploring your personal debt solutions such as a Debt Agreement 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 676 598.