Debt Relief Solutions: Find the right one for you

23rd March, 2012No Comments

Are you looking for a debt relief solution to suit your life and situation? Fortunately there are a number of debt relief strategies available in Australia. Depending on the amount of debt you owe and your personal circumstances, one form of debt relief might be better suited for you than others. The solutions available to you include:

  • Budgeting
  • Debt Consolidation Loan
  • Informal Debt Agreement
  • Debt Agreement
  • Bankruptcy

If you are struggling with debt you should take action straight away. The worse your debts become, the more intrusive the debt relief strategies become to rectify them. For instance small debts could probably be controlled by increasing your cash flow with budgeting and a debt consolidation loan. Whereas large debts might require a Debt Agreement to help you pay off your debts and freeze your interest without having to declare bankruptcy.

Let’s take a closer look at the debt relief strategies available to you in Australia and discuss the pros and cons of each.

Debt Consolidation Loans: a debt relief solution

Debt Consolidation can be a good idea to help bring small debts under control. When you have several debts outstanding it can be hard to keep up with the repayments, interest and fees Especially when you are paying some weekly and some monthly. Debt Consolidation works to increase your cash flow through saving the interest and fees by combining your debts into one loan.

What is it a debt consolidation loan?

A Debt Consolidation Loan allows you to pay off your existing debts with the money from a loan. The result is one debt, one repayment and one set of interest and fees. The benefit of a debt consolidation loan is by rolling your existing debts into one, you save on several different sets of interests and fees. You are also left with a single regular repayment, which is easier to manage.

What’s the catch?

Before you decide on a consolidation loan as a debt relief strategy, you need to look at the fees involved. If your consolidation loan is being used t cover other personal or vehicle loans, there may be early breakage charges for paying off you debt before the agreed time. These charges could outweigh the potential savings you could make. Always read the fine print before going ahead with the loan.

An Informal Debt Agreement: a short term debt relief pact

Life doesn’t always go as planned. Sometimes, things such as illness or injury, job loss or relationship break-ups can impact your ability to repay your debts. If you are experiencing financial hardship, an informal debt agreement can provide you with debt relief. An informal debt agreement is suited to people looking for a short term solution to their debt problem.

What is an informal debt agreement?

An informal debt agreement is an arrangement between you and your creditors which outlines a new repayment schedule for your debts – one you can afford. The professional Case Managers at Debt Rescue will negotiate with your creditors to find a solution for everyone involved. Depending on your situation, your Debtstroyer Agreement could:

  • Freeze interest and fees
  • Reduce your overall debt amount
  • Allow you to pay out your debt in a reduced lump sum
  • Extend the time you have to repay your debt
  • Or a combination of the above.

As this is an informal arrangement, it won’t be noted on your credit file so it doesn’t have the same long lasting impacts a Debt Agreement or bankruptcy would have.

What’s the catch?

Because this is an informal arrangement, the repayment schedule is incredibly strict. We won’t put an offer forward you can’t afford, so any missed repayments may break the agreement and see all your original debts reinstated. Debt Rescue uses a company called Insolvency Administration Services to help you stay on top of your repayments.

Debt Agreements: avoid bankruptcy with this debt relief solution

Debt Agreements are not everyone’s first choice for debt relief, but sometimes, they are the only way you can avoid bankruptcy. Debt Agreements give people with bad debt a reprieve from the stress of their situation. They allow you to repay your debt in amounts you can afford without the added stress of debt collectors and banks harassing you for payment.

What is a Debt Agreement?

A Debt Agreement is a legally binding contract between you and your creditors which allows you to pay a reduced amount of your debt while all future interest and fees are frozen. Our Case Managers will go through your budget to see how much money you can afford to repay after all your living expenses are covered. We will then approach your creditors and propose a debt agreement with this amount. If accepted, you will need to make regular repayments of this amount to your creditors over an agreed period of time until the reduced amount has been paid.

What’s the catch?

A Part IX Debt Agreement is a form of bankruptcy so once you have entered the agreement, your name will be listed on the National Personal Insolvency Index (NPII) which is a permanent public record.  Credit Reporting agencies have access to the NPII and will note on your credit file that you have entered into an act of bankruptcy, which may affect your ability to obtain credit.

Debt Relief – How We Can Help

You don’t have to tackle your debt alone. Debt Rescue is an Australian owned and operated debt relief provider. We assist our clients with all of these debt relief solutions and are committed to easing the stress of debt for thousands of people just like you. We truly care about you and your personal situation and understand that each case is different.

We don’t provide a one-size-fits-all solution to debt, we tailor a debt relief strategy to your needs and walk you through every step until your debts are repaid and you are free from your debts. If you would like us to help you with your debt relief strategy call one of our Case Managers today on 1800 00 3328.