Bankruptcy in Adelaide - Choices, Choice, Choices

When it comes down to Bankruptcy Adelaide, there are a great deal of options that we get given depending upon who we are, who we approach, and just what has happened. Among the most common confusion I see with Bankruptcy is when it comes to selecting between Debt Consolidation, Personal Insolvency Agreements, and Bankruptcy itself.

Should I consolidate my debts?

When it comes to Bankruptcy in Adelaide, much of the information and facts you receive on this subject will reflect the interests of the advice giver. That is why, if you call a debt consolidation firm, I can guarantee you they will tell you to consolidate your debts. The debt consolidation operation is a multi-billion dollar industry making money in one very simple way: charging you a fee for helping you wrap each one of your credit card and personal loans into just one neat and tidy bundle.

I hate to tell you this but these guys aren't going to be doing it free of charge. Please don't misunderstand me: if you believe your financial problems in Adelaide might be fixed by paying less interest, then go on and look into the possibilities. Even a small amount of interest saved over years easily adds up.

Normally I find if you are reading this blog you've most likely tried to consolidate your debts already and come to the following realisations such as these:

• Your credit rating is no good, and your credit file already has defaults on it so no one will give you a loan, consolidated or otherwise,.

• By the time you work all of it out, you're so far down a hole that saving on a tiny bit of interest simply won't make a great deal of difference,.

• You've quite possibly gotten to the stage where you've had more than enough, you're mentally exhausted, you can't go on yet another day ignoring blocked calls on your phone, ignoring the demands in the mail etc.

Personal Insolvency Agreements

So when it concerns Bankruptcy in Adelaide, what's the big difference between a Debt Agreement and a Personal Insolvency Agreement?

Adaptability is the main thing Personal Insolvency Agreements (PIA) have in their favour. They're also administered by a registered and - may I add - regulated trustee including the government trustee ITSA, and not a private business that advertises on TV. Basically this method is similar to Debt Agreements (DA): The trustee has a meeting with the people you owe money to and they mediate a deal in your place. You can give a lump sum settlement figure or take part in a payment plan, or maybe you can offer them assets as an alternative to cash. This might sound okay when it comes to the complications with Bankruptcy - that is until you realize that one of the difficulties with PIA's is that 75 % of the people you owe money to will need to come to an understanding the deal. If they don't, your plan is denied or has to be renegotiated.

Generally people you owe money want all their money back as well as interest. Sometimes they'll settle for less than the amount you owe them - it's generally a percentage of the debt but let me stress this part: because of all the variables involved in the negotiation process to put together a PIA its difficult to put a figure on what the people you owe money to will in fact settle for.

Most of the time you'll have to pay back 100 % of the debt owed. This is not just because your creditors are greedy or have a mean streak, it's because the administrators take 20 % of whatever is agreed upon with the people you owe money to. That applies whether you use a private company for this process or ITSA, the government body setup to administer to these PIAs.

When it comes to Bankruptcy and insolvency I've heard of creditors opting for less 80 % on rare occasions, but that usually only occurs with a public company going into receivership owing huge sums of money (the kind that makes the news). If you are were owed $10million and you know the people who owe you the money have a team of brilliant lawyers and some very clever frameworks in place and they offer 5 % of the debt, you might take it and be grateful. Sadly, ordinary punters like you and me in Adelaide aren't going to get that lucky!

If you want to find out more about what to do, where to turn and what questions to ask about Bankruptcy, then feel free to contact Bankruptcy Experts Adelaide on 1300 795 575, or visit our website:bankruptcyexpertsAdelaide.com.au.