Monthly Archives: January 2016

What you should know about personal insolvency agreement

Are you completely sunk in debts and are struggling hard to find a way out? If you can find no way to repay your debt to the creditors on time, you can always approach them and propose to get into a personal insolvency agreement or a PIA. As a part of this agreement, you would not be required to pay the full amount on due dates. Instead, you would be paying back the creditor an agreed amount of money over a good period of time that can range between 3 to 5 years.

personal insolvency agreement

         personal insolvency agreement

Misconceptions about PIA

As personal insolvency agreement is a part of the Bankruptcy Act, many people think that getting into such an agreement with your creditorswould mean that you are declaring yourself as Bankrupt. This is a wrong concept, as the PIA is just a part of the bankruptcy Act (Part X) and it nowhere mentions or confirms that the debtor is bankrupt. The only relation that it has with bankruptcy is that it is a nice and legal way to get away with bankruptcy, yet strike a deal with the creditors as if you have gone bankrupt.

The process of PIA

As a part of personal insolvency agreement, as a debtor, you can propose a number of options to the creditor depending on what you can afford to pay. You can either offer the creditor that you would return a lump sum amount of money after a period of time once you have recovered from your financial crunch. You can also offer the creditor to proceed with the sale of certain assets that will make up for the debt amount, or you can offer a combination of these couple of options as well.

Once you have proposed your terms, a meeting of all the creditors would happen, and the creditors would evaluate your proposal based on certain things, one of which is that whether you are eligible to apply for a PIA as per the law or not. Voting would be done among the creditors and if the majority of creditors agree to your proposed terms, the PIA comes into existence. Check out Debt Helpline

Benefits to the debtor and the creditor

The benefits that a debtor would get by using PIA are that they can get rid of the threat of declaring bankruptcy. Also, the debts that are owed would be handled in a more orderly manner under the supervision of the law. There would be no undue pressure from the creditors to recover the debts, which they always do. Last but not the least, impact on credit scores with a PIA is far less severe than it would have been if the debtor had  declared bankruptcy.

The benefit that the creditor would get out of PIA is that they would be getting a larger amount of their money back, as compared to what they would have got if the debtor declared  himself bankrupt. Although they would not get back their money at regular intervals, they would still stand a chance to get back their money after a period of time.

No matter how simple and lucrative it may look, but matters related to personal insolvency agreement could get complicated at times. Hence, it is best that you get help from professional debt consultants who would be able to guide you with the process of getting into a PIA with your creditors and improve your financials and slowly get out of the puddle of debt.

Debt Consolidation Loans for Bad Credit Improvement: Changing Your Financial Fate

There is a disposition to think about that debts need to be chiseled away with time. This is neither the way nor the best method of easing your financial burden. A more effective strategy is to use bad credit loans consolidation for purposes of improving bad credit.

 The relationship between credit and debt score is very close. If our debts are paid within the set time or if a borrower has never defaulted, then we would all have excellent credit scores which would impress the lenders, though this is not a reality. Making use of consolidation for clearing debts is the only solution towards the problem.

bad credit loans

The answers to how bad credit debt consolidation loans work and why bad credit borrowers can get them are positive.

 Effectiveness of consolidation

The problem for bad credit borrowers is finding an effective way to get back to the top of the financial situation. Using debt consolidation loans especially for ineffective credit management purposes means that the source of financial woes can be extracted at a go.

 When dealing with several debts, there are many balances, payment schedules and rates of interest to worry about. This means that a complicated situation can give less rest to the borrower. Picking consolidation solution for bad credit debt can make everything simple, through just a single loan with only a single interest rate and repayment date.

 Since debts are paid in full, score of the credit will be improved but more significantly. Real savings are made following monthly outgoings hence freeing up extra cash. The terms of debt consolidation loan include longer term of repayment period, lower size of repayment sum by almost a half of the original loan repayments.

 It isn’t hard to access it at all. The whole idea about bad credit loans consolidation for clearance of bad credit is to address a poor status of finance. This means that it’s specifically designed for borrowers of bad credit, therefore approval is always on the cards.

 There is of course a stipulated terms of conditions you have to meet when looking for bad credit loans. However, none of them are hard to satisfy. The normal rules for qualification apply, and these include citizenship, age and status of employment. There is no need of having a certain level of debt before using consolidation to clear debts.

 The capability of meeting the deadline of repayments on the debt consolidation really matters. If you replace 4, 5 or 6, means that the affordability is not a big deal.

 How to get the best deal possible

To find the best possible bad credit loans consolidation deal is appropriate if the best possible results need to be enjoyed. With several financial products, the best option can be extracted online. Online lenders have been in relation to bad credit borrowers, charging lower interest rates compared to the traditional lenders. They are appropriate for acquiring a debt consolidation loan for improvement of bad credit. Using consolidation to clear debts, the pressure is immediately lifted as long as the terms of repayment are favorable and with no sudden charge. Therefore, you need to go through small print before choosing your debt consolidation loan.

For more information, just visit us at https://www.debtmediators.com.au/bad-credit-debt-consolidation-loan/.