When your debt becomes unmanageable and creditors are at the door, then time to take some serious action is the last option. Although there are other ways to deal with accumulated debt, the safest bet would be to hire a professional to seek counseling as well as other services like negotiating loans and dealing with creditors.
Professionals in the debt solution field often assist people with debt agreements and bankruptcy. Australian debt solution services are pretty commendable; there are several professionals who provide counseling services for free and will guide you with the best possible debt relief solutions for you according to the kind of debts you owe.
One thing a professional might discuss with you is a debt management plans. This one is a plan that need to be brokered to your creditors and they have to agree to it. For this reason, it is advisable to hire a professional to negotiate because the creditors may not listen or agree with the proposition when the debtor communicates it to them. In this plan, the creditors will be paid but on simpler terms that the debtor is more able to meet. The debtor only has to make one single payment and doesn’t need to communicate his financial conditions to creditors who may constantly need an update on their money.
You don’t actually pay the money to the creditors, but to the debt management company who acts as the middle man. The debt management company will distribute this money or installment among your creditors. This one is easy and helps stay out of court. Despite that, a debt management plan is applicable on unsecured debts.
Another great debt relief solution is a debt relief order. This is for people who survive on low incomes and their debts are also on the lower side of the scale. This debt solution is great because it doesn’t right away just write off your debts. It freezes the debt repayments and interest charges for one year and allows you to have this time to improve your financial situation. In the matter of one year, you live debt free and try to get financial matters under control. If things do not improve in one year’s time, then your debts will be written off.
It may seem like a wonderful idea to get rid of debt, but you have to be eligible for this, similar to filing for bankruptcy. In fact, this is a cheaper and better option than filing for bankruptcy. Although not all debts that you owe can be written off under debt relief order. Credit card, bank overdraft and some loans are included but other loans and payments like child support, student loans and others are not included and will have to be paid. You can file for the debt relief order through competent authorities that are approved by the Insolvency Service. Your creditors will be notified on this and you do not have to pay them off for one year.
To administer all of these, it is crucial to hire a professional. Some may argue that it is a waste of money, speaking in terms of fees and service charges, but the truth is that we do not know what they know. And that is not the only benefit of hiring a professional debt negotiator. Other benefits include:
Once the debt agreement or debt relief solution is decided upon, make sure you know the mechanics of it, so that no one can scam you into anything. Speaking to the professional will make the entire process much easier, especially deciding the most favorable option for you.
