Is Debt Consolidation right for me?

Most people believe that the only way to get a Debt Consolidation option is to go to the bank and apply for one. If you are solvent, this seems like a good method.  But is it appropriate for people who are insolvent – i.e. unable to pay their debts when they fall due? Also, if you are on a low income and have a high amount of debt, Debt Consolidation might not be the right option as you may not be able to afford the loan repayments.

If you are in one of the cases described above (insolvency or low income), you might want to consider other legally accepted forms of Debt Consolidation such as a Debt Agreement or a Personal Insolvency Agreement.

What is a Debt Agreement and what does it involve?

You may propose a Debt Agreement to your creditors if you meet certain criteria. The proposal may involve you making regular payments to repay creditors over a longer period of time (say 3 to 5 years) and may involve you paying less than 100% of the debt due. All interest charges are stopped under a Debt Agreement. The regular payment you will make under your Debt Agreement will depend on your income and expenditure.

What is a Personal Insolvency Agreement (PIA) and what does it involve?

A PIA is a procedure whereby a debtor may propose an arrangement with creditors when the debtor cannot meet the debts due. A PIA would usually be considered when a Debt Agreement was not able to be used. The form of the Personal Insolvency Agreement proposal that the debtor may put forward to creditors will usually involve either, a sale of all of the debtor’s property or an offer to contribute money in instalments over time, or a combination of both.

Our team at Australian Financial Solutions are focused on providing Debt Solutions to people with debt commitments that have become unmanageable. If Debt Consolidation is not right for you, we can assist you with Debt Agreement or Personal Insolvency Agreement.  Contact us today on 1300 237 669 or info@austfinsolutions.com.au for a free debt analysis.

The Australian Bureau of Statistics reported on the 4th of Feburary, 2009 that in seasonally adjusted terms (not including the impact of the government’s December 2008 ‘Stimulus Package’), all retail industries had a sales increase in December 2008, with Food retailing (+1.4%), Department stores (+8.3%), Clothing and soft good retailing (+5.8%), Household good retailing (+9.9%), Other retailing (+2.6%) and Cafes, restaurants and takeaway food services (+1.7%).

With the impending stimulus packages to be released over the next couple of months, and the government encouraging retail spend, some people may find themselves in a worse of position than before with over spending.