Category: Debt Management

Are your debts getting out of control? Are you unable to manage your multiple debts? If your debt is giving you sleepless nights, it is important to seek help quickly. Remember, ignoring your debts won’t make them go away. It will only make things worse.

If you are in debt, here is a list of questions you should ask yourself:

Question 1

Are you finding it difficult to meet your monthly repayments?

Answer

Consider rolling all your multiple debts into one monthly repayment. It will:

>> Reduce the amount you pay each month; and

>> Make your debts easier to manage.

Question 2

Do you have multiple debts (i.e. mortgage loan, credit cards and store cards)? Are you having trouble managing these multiple debts?

Answer

Multiple debts means:

>> Paying multiple sets of interest; and

>> Finding it hard to stay on top of your multiple debts.

So, consider consolidating your debt because it will:

>> Enable you to keep track of your debts; and

>> Enable you to pay down your multiple debts.

Question 3

Do you have negative listings and defaults listed in your credit file?

Answer

If you do have a bad credit history, you will find that your loan options may be limited.

Question 4

Do your multiple debts have high interest rates?

Answer

Consolidating your debt should enable you to get a loan with a lower interest rate.

Question 5

Do you have equity in your home?

Answer

If you do have equity in your home, you may be able to use it to pay down all your multiple debts.

Question 6

When is it the best time to consolidate your multiple debts?

Answer

You can consolidate your multiple debts:

>> Whenever you consider you are ready; and

>> When you are unable to manage your multiple debts anymore.

Before you Borrow

If you are thinking of borrowing money, here is a list of steps you should consider and which may help you:

Step 1

Use a budget planner to work out what you are spending now.

Step 2

Use a borrowing power calculator to calculate:

>> How much you can afford to borrow; and

>> If you can afford the repayments.

Step 3

If you decide to borrow, shop around for the best deal and take time to compare:

>> Interest rates;

>> Product features on offer; and

>> Fees and charges.

Step 4

Know who you are dealing with. This means anyone engaging in credit activities (e.g. anyone providing credit or providing credit assistance to you) must give you:

>> A copy of the “Credit Guide”; and

>> A “Credit Proposal Disclosure Document “(CPDD), with the required information listed such as their Australian Credit license (ACL) number, fees and details of your right to complain.

Case Study

Judith is a single mum with two children. She is struggling to pay her multiple debts and her payments are now three weeks in default.

Judith met a professionally qualified finance broker who was able to help her:

>> Negotiate a one loan repayment plan;

>> Reduce her monthly repayments; and

>> Save her money on interest charges.

The benefits available to Judith are best illustrated in the following simple example. The example assumes that Judith has a mortgage loan of $300,000 and a credit card with a credit limit of $12,000:

Current Home Loan Credit Card Total Loans Your New Loan

Loan Amount: $300,000 $12,000 $312,000 $312,000

Interest Rate: 6.25% 18% n/a 4.75%

Loan Term: 25 years n/a n/a 25 years

Monthly Repayment: $1,979.00 $200.00 $2,179.00 $1,778.00

Total Interest Payable: $293,702 $18,931 $312,633 $221,630

From the example above you can clearly see that:

Judith has saved interest of: $91,003.00

Judith’s monthly repayments will be reduced by: $401.00 per month

So, if your debts are getting out of control or you are struggling to make ends meet. It is important that you seek help from someone who can fix your debt problems. This is the time for you to contact a professionally qualified finance broker who will help you to obtain a loan for consolidating debts with:

>> One monthly repayment; and

>> One lower interest rate.

Useful Tip

Avoid seeking help from someone who makes unrealistic promises about getting you out of debts or who advertises that they can help you, no matter how much you owe. Remember to choose a reputed, qualified and experienced finance broker who will go the extra mile in solving your problem.

Over the years of working in the family law field, I have observed different trends with regards to debt and bankruptcy.

The bankruptcy laws have changed drastically and I tend to steer my clients away from bankruptcy because there is a much easier route to get debt relief and most people are not aware of how easy it really is.

When I use the statement “easy” I do not mean simple. There is work to be done and patience to be had. My approach to credit repair is the same regardless of the number of debts that need to be addressed.

While I will not share trade secrets, I will share some basic information that may help with the decision on what road you should take to get some financial relief.

My approach is not to use bankruptcy as an out. The reason is obvious. With my system, your credit will get better not worse. Not only will your credit rating improve, your debts will disappear at the same time, this is a win win scenario.

With bankruptcy you will go through the hassle of appearing in court, paying an attorney to prepare the bankruptcy documents, and then the 7 to 10 year mark on your credit.

No matter what, this is the ONLY thing that cannot be removed from your credit report. By law it must remain on your report for at least 7 years.

I have had many of my clients try other credit repair companies with little success. Part of the reason we are successful is we understand the laws and we do not quit until all items are removed.

I caution people to stay away from companies that charge by the month because common sense says that there is no incentive to getting the job done in a timely manner.

Keep in mind that there is no set time that this can take. I have had clients who I was able to “get clean” in four weeks and some take four months. There is no method to the madness. The process is the process and there is really no way to take short cuts as there are laws that govern the process.

The reality is sometimes it takes guts to take on some of the debtors and collectors so someone with thin skin may not be as successful. As a former Settlement Administrator for a Public Company I have no problem going up against the best of the best. I have studied the laws regarding debt collection and reporting and am confident in my ability to remove anything.

At the end of the day you have to make the best decision for you and your situation. Getting your credit report clean is a very real thing and you can have clean credit in as little as four weeks.