Category Financial Services

Debt Agreements Will Stop the Stress

Are you being squeezed hard for your debts? With Australian debt agreement, you can get the needed reprieve from your creditors and stop them from calling or harassing you. They are generally a compromise for many Australians who are considering filing for bankruptcy and allow you to bring your debts to manageable levels. They remove a headache by allowing you to make a single payment for all of your debts.

Debt agreements are generally a great option for the low-income earners whose debts are spiraling out of control and are unable to pay up all the money that they owe while not wanting to go bankrupt. Debt agreements are not without consequences and sometimes, these consequences can be long term, limiting your ability to get credit in the future.

It is prudent to consider this option only after you have exhausted other debt resolution options. When you are planning to enter into these agreements as an option to break free from debt, make sure that you clearly understand the terms of the agreement as well as the effects that it will have on your financial security and eligibility for future credit.

What to Keep in Mind When Considering a Debt Agreement

A debt agreement is an excellent option for people of assistance to people in need. Before you get into these agreements, make sure that you have analyzed all your options and determined that this is last your resort before you file for bankruptcy.

Some of the options available for you include talking to your creditors so that they can give you additional time to pay your debt or renegotiate a suitable payment plan. There are certain creditors who might amenable to accepting smaller payments as settlement for a debt which will relieve the financial pressure off your back.

When exploring these options, you can decide to get in touch with your creditors directly. Alternative, you can contract a debt counselor to help you make sense of your debt and suggest some viable options that you could consider. There are financial services advisors who can even talk to your creditors directly and assist you with proper budgeting. They can also direct you to the proper channels for government assistance with your debts such as the Australian Financial Security.

It is important to keep in mind that the debt agreements will not help you with all kinds of debt. There are certain debts that are not covered by debt agreements.

How a Debt Agreement Works

The website for Australian Financial Security Authority contains information on the eligibility criteria for debt agreements.  You can contract a competent debt agreement administrator to assist you with the details of the application and to help you with the preparation of a proposal for a debt agreement.

Once you submit a proposal, it will be sent to all of your creditors and they will vote on whether to accept or reject the proposal. If the majority of them accept, the agreement will get into force and all your creditors must accept the terms of this agreement. For more details, just visit http://www.debthelpline.com.au/.

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4 Budget Cuts to Avoid When Paying Off Debt

If you are going through a credit repair process and managing payment for debts, your first step is to cut down on your living expenses and budget. This will enable you to allot more of your money to paying off your bills and debts. This is a smart way to go about your quest to becoming debt-free. However, there are instances wherein consumers go too far to reach that budget cut. There are some aspects of your life that you can do without (such as shopping and dining out) and there are others that you cannot afford to compromise.

To find out what areas of your life to impose a budget cut on and what you shouldn’t, a professional credit repair Australia advisor can help you out. To get started, here are budget cuts to avoid at all cost, regardless of how big your debt problem is:

Current Debt

This might seem like an obvious point but a lot of people overlook their debt when creating budget cuts. To be specific, some people are unable to keep track of their loans and debts that they are unable to manage their finances well enough. This could be disastrous since you could forget to pay some of your debts, resulting in higher interest rates and penalty charges that are adding to the problem. Write down your debts in a spreadsheet or piece of paper so you know exactly how much you owe, to whom and when they are due each month. Avoid cutting off your debt payment and make it your number one priority during payment schedule.

Fixed Expenses

This is where prior budgeting comes into play – you want to be able to know exactly what you need to spend on in order to survive day by day. The fixed expenses include food or meal allowance, utility bills, transportation and medicine, and so on. These are expenses that you cannot live without. Therefore, you should not cut them off your budget list.

Emergency Funds

When you are undergoing credit repair help, you tend to put all of your focus on your overwhelming debt. This can cause you to overlook your basic essentials such as emergency health care. Financial experts have always insisted that you should always maintain an emergency fund. The same is true (and even more so important) when you are going through credit repair. You want to be able to have enough money available for emergency situations.

Savings

The savings component of your monthly budget should be separated from your emergency fund. Your savings represent a portion of your money that you set aside, either for a project or things you want to treat yourself to. Meanwhile, emergency funds are created for a more specific purpose. Even though you want to put in as much on your debt payment as possible, you still have to set aside some money for savings.

Credit repair is a long and tedious process. But if you want to regain your status of financial freedom, you need to be highly patient about the entire process. In the end, you will reap the benefits of living life free from debt. For more details, just visit https://www.debtmediators.com.au/credit-history/credit-repair.

 

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Why you might want to consider debt consolidation

Debt consolidation refers to the debt solution where all your outstanding debts are merged into one so that it is a single debt. This is usually helpful in saving money when you calculate debt owed versus the pay you will have to make. Also it makes the whole process of debt repayment much easier. Debt consolidation can take place in different ways. However, it may not suit every borrower that has a debt burden. This article takes a look at debt consolidation as a solution to the debt payment crisis affecting many people today.

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Benefits

There are benefits to consolidating loans. First is you eliminate multiple payments, and thus you improve as a person or as an organization. Then, you reduce the monthly costs. Calculate debt consolidation rates you will pay and compare with what you are currently paying on these loans, and you will realize the money-saving  aspect. Additionally, the headache of having to deal with many creditors is eliminated. Thus all you have to stomach is one creditor. Most important in loan consolidation is the risk of negatively impacting your credit score becomes significantly reduced.  Besides wouldn’t life be much easier when you make just one monthly payment as opposed to several?

The process

After determining that debt consolidation is the best solution for you, the next thing you should do is gather as much information as regards to your lender as well as the loans. After this, determine the debt that you would like to consolidate because sometimes a company may have four loans and would prefer consolidating three while paying the fourth in full amount. You should then compare your current situation to the benefits of consolidating so that you know if it’s worth it. You can do this using debt relief calculators. Finally, find a consolidation lender.

When to consolidate debt

People who have credit card debt that generally comes with very high interests are great candidates for this. They are also great for people who are capable of maintaining current repayments and are just looking for a better deal. Also they could be useful for people who have significant assets but cannot meet debt repayment because of low income, especially when the income situation is only temporary.

Avoid multiple credit accounts

 You will find many borrowers opening another line of credit to meet their obligations, which is a mistake as  having too many credit accounts can not only take so much of your precious time to manage but will also bring with it potential problems in the future. Therefore, even after you work out your debt and consolidate, reduce the number of open accounts that you have.

You can consolidate loans by yourself or use the services of a company but what remains a fact is the benefits are immeasurable. The low interests, dealing with a single lender among others are just some of them. Use a debt calculator to calculate debt and compare the benefits you stand to benefit from with debt consolidation and then take the step.

For more information, visit at https://www.debtmediators.com.au/calculators/

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