Despite your well-planned financial management strategy, there can be instances that you may land yourself in debts. It may be because of unforeseen expenditure like accident, loss of earning, education of children; the reasons could be many. At the national level, the New Daily magazine of Australia reports that as against the accepted standard of half household disposable income, household debts have increased by about 180%. Given this scenario, the Australian Government has introduced certain exclusive solutions for personal debt in Australia, which have come as a boon to individuals.
The Australian Financial Security Authority offers two types of solutions for individuals who are caught in the web of debts. The two types of debt solutions in Australia are informal and formal actions. In fact, these actions are within the ambit of Bankruptcy Act 1966.
As far as informal solutions for personal debt in Australia are concerned, you may contact your creditors directly or through your authorized attorney or any of the registered trustees. You may express your difficulties in paying your liabilities. The creditor may renegotiate the loan and may even give you additional time or reduce the EMI. This may help you to get over the situation.
If this is not possible, then you can also take up any of the formal solutions for personal debt in Australia. In the first place, as provided in the Bankruptcy Act, you may apply to the Australian Financial Security Authority (AFSA) seeking extension of time to meet your liabilities. If the AFSA agrees to your request, then you will be given a maximum of 21 days to repay the loans.
Yet another formal solution available to you is to apply for Bankruptcy. You will have to make this application to the appropriate court. If your application is accepted, the court will declare you bankrupt. This declaration will be valid for a maximum period of three years. However, based on the recommendations of the trustee, the court may extend the period of bankruptcy up to a maximum of eight years.
Agreement of Debt:
Alternatively, you may also speak to a debt consultant about personal debt solutions, who in turn may speak with your creditors for accepting a certain amount of money that you can afford as one-time settlement of your debt. If the creditors agree to your suggestion, then the debt consultant would prepare a debt agreement on your behalf. However, such settlement can be enforced only if the value of your assets and income (after tax) are within the limits specified in the Bankruptcy Act.
Consultant Will Guide You:
You may also contemplate entering into personal insolvency agreement with the creditors. According to this agreement, you may be obliged to pay the creditors either in full or in installments or any specified lump sum amount towards your loan account. Your debt consultant or registered trustee will provide you information on debt solutions. In fact, the consultant apart from negotiating your settlement also makes all the necessary paper works on your behalf. However, for this you may have to enter into an agreement with the consultant.
For more information, just visit us at https://www.debtmediators.com.au/personal-debt-solutions/