Are there any alternatives to avoid bankruptcy?

People who find themselves in serious financial difficulty generally think of bankruptcy as their only option, and one to be avoided at all costs. This can create an unnecessary amount of fear and stress for those who are already under a lot of pressure, because for some people, bankruptcy is often not as bad as it is made out to be. More importantly though, it is not the only available option for settling unmanageable debt. Many people do not know this, but you may also have the option of entering into a Debt Agreement or a Personal Insolvency Agreement.

Debt Agreements and Personal Insolvency Agreements are initiatives that were created by the Australian Government to help indebted Australians avoid bankruptcy. Before they came into play, if you were in debt you had two options: find a way to pay it in full, or declare yourself bankrupt. Debt Agreements and Personal Insolvency Agreements allow a person to pay back a percentage of their unsecured debt as opposed to becoming entirely bankrupt, and as such, can allow a person to hold onto the income and assets they would lose if they declared bankruptcy.

To put one of these agreements forward you must first seek the services of a professional, who will determine which of them you are eligible for. They are both similar in their purpose, but which one you can do will depend on your income, your debt level, and any assets that you may have. They will then determine your affordability by going through a household budget with you, and calculating the percentage return your creditors would get if you gave them the amount that you can afford. Your offer is then put to your creditors, and if it is accepted by the majority it becomes binding on all of them. Your debt is frozen, with no added interest, and once you pay the amount you have pledged you are legally released from your unsecured debts.

These agreements also come with consequences, in that doing one will put a mark on your credit file, but they can be a good alternative for those who need formal assistance with their debt, but don’t necessarily have to go bankrupt. To propose a Debt Agreement you need the help of a Debt Agreement Administrator, and for a Personal Insolvency Agreement, a Registered Trustee. Our company is equipped with both, which means that we are able to help you with Bankruptcy, Debt Agreements, and Personal Insolvency Agreements. Call 1800 462 767 today to find out if you can avoid Bankruptcy with an alternative arrangement.




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