If you are unable to pay your debts you may be considering bankruptcy as an option. It’s very important to understand that bankruptcy has serious, life changing consequences and it should only ever be pursued as a last resort.
Bankruptcy may mean that your assets are seized, your travel overseas may be restricted, your bankruptcy will be on public record forever and disclosure about your bankruptcy to various parties will be mandatory.
It is certainly not an action to be taken lightly, and while it may look like an appealing option at surface value, there are usually many, better options to consider before bankruptcy becomes the best suited.
Getting your debt under control may be as easy as better managing the way your income is spent. Formulating a budget and sticking to it will make your money stretch much further, and provide an organised approach to your day-to-day expenditure and making repayments to any creditors. There are professional services available to help you develop a budget that suits you and your lifestyle while making it possible to achieve your monthly payment goals.
Through either debt consolidation loans or mortgage refinancing, it’s possible to combine all your monthly repayments into one, and ideally end up with smaller, more affordable payments at a lower overall interest rate.
If you’re having short-term issues meeting your monthly payment requirements, you may choose to negotiate an informal arrangement with your creditor. This means contacting the creditor, explaining your situation and discussing options that will be mutually agreeable for both parties to see you through the problematic period. This might include allowing more time to pay, freezing the interest or renegotiating the loan amount.
A professional advisor will be able to aid in communications and agreement between both parties, and ensure all suitable avenues are explored.
If a person is unable to pay their debts as and when they fall due, this is referred to as personal insolvency. When a person is insolvent they may choose to enter into a Debt Agreement with their creditors, by which a compromise is negotiated to satisfy both parties and, on agreement, becomes legally binding, or they may also choose to enter into a Personal Insolvency Agreement with creditors, which is administered by a Trustee and voted upon by a majority of creditors.
Again, the most effective way to come to any agreement pertaining to personal insolvency is to utilise the services of a reputable professional.
There are many options which offer a better alternative, and with the right professional help you should be able to utilise any of the above agreements in a way that suits you and satisfies your debtor.
If, however, you’ve exhausted all these options and you have been given professional advice to declare bankruptcy, make sure you’re well informed and do your research so that you understand what you’re getting into, what will be required of you, and the consequences of becoming bankrupt.
Professional help is invaluable when managing your debt, especially if you’re considering bankruptcy. Always make sure that you consult a reputable provider of debt assistance, for example, Fox Symes, who are Australia’s largest provider and have extensive skills, knowledge and good relationships with creditors.