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Full name Part IX Debt Agreement
A binding agreement between you and your creditors under the legislation, Part IX of the Bankruptcy Act, as an alternative to Bankruptcy
Informal Arrangements are a negotiated payment plan for your personal loans, credit cards and old debts. They will be negotiated by the administrator with your creditors, on your behalf. It is not a loan, it is a payment plan negotiated for you and administered by Debtrite.
You will have one automatic payment you must maintain that is conveniently structured to coincide with your pay cycle. The administrator will then distribute the payments to your creditors on your behalf. There isn't a fixed term, as this will be determined by your budget and the negotiations we do with your creditors.
We will minimise the interest you are paying on your credit cards and personal loans as much as possible, and sometimes even get it frozen. Outcomes are designed to be affordable and are based on your current situation. We will do a budget with you, to make sure your payment plan is sustainable.
Informal arrangement are generally accepted by creditors, when there has been a good reason for you falling into financial hardship. Life events such as sickness, loss of employment or income, relationship breakups and accidents are common acceptable causes of debt Hardship. There is no limit to the amount of debt or income you may have, but you must be in Financial Hardship.
Your payments will have to commence before the Negotiation can start, so that sufficient funds will be available to pay the negotiated payment plan after we have approval.
It should be noted that communicating with your administrator usually resolves issues around creditors contacting you.
When all else has failed, Bankruptcy can offer you a chance to start again
It is best to realise that Bankruptcy is not designed as a punishment but as a protection and means to allow you to get a fresh start. If you are facing a situation where there is no money left to live on once all the bills are paid and it is not possible to make a payment plan, then Bankruptcy provides an opportunity to start again.
Before deciding on this course of action, you should refer to the Government website Australian Financial Security Authority. On this site you will see details of all the outcomes of Bankruptcy.
These are some of the facts you need to be aware of -
Debt Consolidation generally refers to a Loan that will combine a multiple of loans, cards and Debts into one Loan. It needs to reduce your monthly payments into one that is much more affordable and convenient.
But you must act early. You need to get on top of a developing financial problem before payments start running late and your credit is starting to slip.
It may be via a Personal Loan or Consolidated into a Home Loan. If you leave it too late and your credit is affected, you will find that the Interest rate will increase, set up costs increase and you may have difficulty in obtaining the loan amount you may need or want. Your options become more restrictive the more difficult your financial position is. It can still be fixed, but it costs more to do so.
If you have taken out a Payday Loan ( EG: Money Me, Wallet Wizard, Cash Converters) we have found you will not be able to use a Personal Loan to Consolidate your debts. Having a loan from a pay day loan company showing on your credit file, generally prevents you getting approval for a low Interest Personal Loan. However Home Loan Debt Consolidation is still possible.
So needless to say, the earlier we can address a Debt problem the Better. Do it before you get desperate enough to apply for a Pay Day Loan.
Early action on Debt Consolidation, may even see you able to get cash out for other purposes.
If you have left it late, contact us as quick as possible to start on the solution. Generally the Debt Hole is only going to get deeper from here.
Things that will effect your ability to Consolidate your Debts into a Personal Loan.
If your cards have gone over Limit, Repayments are late, there is unpaid Tax Bills, you are self employed and haven’t done your tax returns, if you are newly employed or in Business you will need to look at other Options. See the next section on Specialist Lending or go back to Debt Agreement and Informal Arrangements.
An option if you have equity in your home, is to use a specialist home loan lender.
If you have been knocked back by the banks, that is not the end of the story. The reasons may be many. Do you have a blemish on your credit report. Are you self employed with not a lot of financial records. Do you owe money to the Tax Department. Have credit cards been over the limit or late. Have you just been spending a lot of money lately. All of these situations plus a lot more will require a Specialist Lender. This is even the case when you may have plenty of Equity in your home and the new payment plan puts you in a much more financially secure position.
At Money Buckets we have been working outside the constraints of traditional Bank Lenders and have developed relationships with Lenders that see things a little differently. They take a more out of the box approach to their Lending criteria. A more common sense approach.
The Banks hands are tied by regulated Credit Policy, which is inflexible. Even though you may have been a customer for a long time, if your circumstances are not to policy, it’s a NO. They can't help you. These are the rules, for what is called a Deposit taking Institution. That’s anybody that holds people money in a bank account. They are not allowed to take risks.
There is however another alternative and it is called a Non Conforming Home Loan. There are a variety of Lenders who specialize in this Non Conforming area and the Interest rates they charge have been becoming more and more competitive. Most Brokers will not get involved in this Lending, due to the amount of work and expertise involved in getting one of these loans approved.
However, Money Buckets has a lot of experience in this area and simply build a Fee for service into the home loan, to cover the additional costs of providing this service. This is paid by the bank when the home loan settles. That way, the fee is only paid if Fast Debt Help can achieve a positive solution for you.
The process when applying for a Non Conforming Home Loan is a little different to that of a Traditional Lender. Money Buckets needs to submit an application signed by you, with all required documentation and loan papers first, before we can quote an interest rate or repayment amount.
It is then up to you to accept or reject this once we have an answer and offer. By law we must put you in a better position overall, before we can proceed with a loan, but no firm interest rate or repayment amount can be quoted, until after an application has been assessed. We can, however, give you a guide beforehand. It is up to you then to accept or reject the offer.
In many instances Money Buckets customers, who have found themselves needing a non conforming Home Loan, may have still built up too much Debt to refinance. This might be Credit Cards, Store Cards, Personal Loans, Tax Debts etc. To facilitate the approval of a new Home Loan it may be considered necessary to negotiate with your creditors to reduce the outstanding debt, to fit into what can be approved with the new home loan. The same Debt Negotiation may be necessary if your budget means you can only afford to pay a certain amount as a repayment and the loan needs to be less.
Money Buckets is affiliated with Debtrite, a specialist Debt Negotiation Company that will negotiate lump sum settlements on your outstanding debts, paid with the proceeds of your new loan. In many Instances this can save you thousands of dollars. This alone can make a big difference to your prospects of consolidating your debts into a home loan.
Once Money Buckets takes on your case it is imperative that you do not negotiate with your creditors directly as this will prevent us from obtaining the best possible outcome for you.
Money Buckets takes a personal approach to Non Conforming Lending. We will work with you to obtain the very best outcome for your Financial Well Being. Take the time to get it right, this is the most important thing you can do to remedy a difficult financial position. Providing your consultant with all the required documentation in a timely manner will help speed up the process.
Let Money Buckets turn that No to a Yes!
Friends, Relatives, acquaintances just don’t know about Debt Solutions
If they don’t have the experience don’t Listen. If they haven’t been in your position they just don’t understand.
There is way too much Financial Snobbery and misinformation about for uninformed and inexperienced people to offer advice. People who have never been in Debt Stress and have never had a Financial problem can be less than helpful.
What we often find our clients have been advised to do is at best, just plain ignorant or at worst Financially Dangerous.
Unless you are being offered the money to fix the situation, without having to pay it back, be very careful.
Often Friends and Relatives offer Loans in good faith, but without realising that it is going to take a long time to get it back. When you can’t afford to pay it back quickly or when your relatives or friend demands it back because all of a sudden, they have a problem of their own. There is bad blood, arguments and then there are two people in Financial Difficulty.
Ringing your creditors without a plan and without the knowledge of what can be achieved, can still end up with credit defaults, Heavy Interest and penalties and people being locked into long terms of repayments. Often people agree to payment plans they can’t afford, which can make the situation worse. Or a payment plan so long and with so much interest, you can virtually be enslaved financially for the rest of your working life.
If a Debt Collector can scare you away from the solutions that are legally available to you, they can lock you into financial slavery. They can take a large percentage of your income for life.
Doing nothing is just as bad and quickly blows out to bad credit and Debts escalating out of control. This sort of Bad Debt does not go away until it is addressed with a permanent solution.
We see many people staying in a situation of making too many payments, trying to do the right thing and having their entire social life taken away, some not even able to see their children because they cannot afford to buy food.
And then we find someone is there, advising them to do nothing. Advising them not to fix the situation with proper help. Scaring them into doing nothing.
The inevitable is depression, isolation and mental health problems. Relationships break up, jobs are lost. Depression sets in, often permanently.
Fixes are rarely overnight and will take some hard decisions. It is often scary.
If you are in a bad position, it will take time to put you back to square one credit wise.
But having a solution in place, relieves Stress and allows recovery to commence.
Get the right advise. Call Money Buckets 1800 825 010
Customer Enquiries: 1800 825 010
Admin Office: 0243696287
Post: PO Box 6100, Kincumber, NSW, 2251
Money Buckets ™ is a Trademark of Starlight Home Loans T/as Fast Debt Help
ABN: 94 145 613 056
Credit Lic 388809
MFAA membership 319292
Affiliates: Second Step Administration RDAA 1668
The Rite Place Pty Ltd trading as Debtrite