Debt relief is when your debts are reorganised, using a number of different strategies, to provide you with full or partial relief from your debts. Debt relief may involve rearranging your finances, negotiating with creditors to reduce or eliminate your debts and reduce interest rates, or extending loan terms, so that your debt situation is more manageable.
Debt relief solutions are designed to help you rearrange your debts so you can reduce your debt load and work towards getting rid of your debt altogether. These strategies are created to help you arrange manageable repayments, lower the interest rates you are paying, in some cases to help you pay off debts faster, learn to create a budget, manage your finances better, and ultimately, get out of debt completely.
Debt Negotiators is here to help you with your debt. We offer a free assessment of your financial situation and deliver financial guidance, help you create a budget and identify what debt relief solutions are available to you and even identify potential debt assistance for people with bad credit.
Your credit score might be the last thing on your mind when you are trying to keep your head above water as you feel like you are drowning in debts. Your credit score, or credit rating, helps lenders see your credit behaviour and helps them make decisions about whether to loan you money, what interest rates to charge you and whether you are a credit risk. Depending on your current financial situation and the debt relief solutions you choose, your credit score may be impacted.
Learning to budget, getting financial advice or a debt management plan will not have a direct impact on your credit score, although getting out of debt and learning to manage your finances so you stay out of debt can have a positive impact on your credit score in the long term.
Debt Consolidation Loans, Debt Agreements, Personal Insolvency Agreements and filing for Bankruptcy are all different debt relief options. These options will have an initial negative impact on your credit score. However, if you can get out of debt and stay out of debt, they will ultimately help you improve your credit score over time.
There are many debt relief options available out there to help you get out of debt and learn to stay out. The debt help solution you choose will depend on your personal circumstances and financial situation. The most common debt help strategies are:
- Budgeting – learning to plan and understand your financial needs each month.
- Getting financial advice – free financial advice can help you put together your budget and formulate a plan for managing your finances better.
- Getting a Debt Management Plan – an informal agreement between you and your creditors to help you pay off your debt with them.
- Debt Consolidation – rolling all your debts into a single consolidated amount so you only have one repayment to make each month with manageable terms.
- Mortgage Refinancing – using a new home loan to consolidate your current debts into your home loan
- Debt Agreements – an alternative to bankruptcy, a Debt Agreement, or Part 9 Agreement, is a formal agreement with your creditors to pay off your debts.
- Personal Insolvency Agreements – a PIA or Part 10 Agreement is a legally binding agreement between you and your creditors about how you will pay off your debts with them and is another alternative to going bankrupt.
- Filing for Bankruptcy – as your last resort, filing for Bankruptcy is when you admit you are fully unable to pay off your debts and can impact what assets you own and your future credit needs for a long time.
Yes, a Financial Advisor can help you with your debt. Although financial advice is often general in nature, Financial Advisors can help you:
- develop a budget
- identify what you can and can’t afford to do
- set financial goals
- put together a Debt Management Plan
- identify debt help options
- identify behaviour that leads to debt and how to change.
At Debt Negotiators, we offer free financial advice based on your personal financial circumstances.
Being in financial difficulty can get you down and make you feel like there is no way to move forward. This is not the case, there are options available to help you find relief from your debts. Your ultimate aim should be to get out of debt and bring your finances under control.
Debt relief is a plan to help you get out of your debt and to maintain better financial health moving forward. You need to start by understanding your current situation. Create a list of all your bills and debts, including the interest rates, repayments and term for each one. This will help you prioritise your bills and work out a plan to pay them off, as well as create a monthly budget.
Try and pay your bills when you get paid instead of when they’re due, that way you know what is left to spend. Aim to prioritise secured loans such as your home loan or car as they can be repossessed if you miss too many payments. Use cash for groceries and such and leave the card at home as this reduces the opportunities to buy things on credit.
Look at whether you can pick up more work, a second job perhaps, to help you earn more money so you can pay off your debts.
Seek out financial advice to identify further actions you can take and identify what debt relief solutions may be available to you. Try a few different providers; your bank, government financial advisors, or seek help from a debt management company to discuss debt consolidation, refinancing, transferring your credit card balance or other more formal options such as Debt Agreements.
Yes, there are debt help options available for people who have bad credit. Start by looking at all the different debt help options available to you. A financial advisor can help you with this.
Your debt situation and ‘bad credit’ is usually linked, as missing repayments regularly will negatively impact your credit rating. Your first action should be to review your current financial situation. Create a list of all your current bills and debts as well as their interest rates, payment terms and payment dates.
As you have a bad credit rating, you’ll have to pay higher interest rates. Until your credit rating is improved, you’ll have to accept this fact. However, this doesn’t mean you have to get stuck in a loop where you are only paying off your interest. Consider the following options:
- Look at options for getting a personal loan from your bank, family or friends
- Look at whether you can find more favourable banking options such as joining a credit union with lower interest rates
- Seek financial advice and support to help you look at other alternatives such as:
- Renegotiating your terms with your creditors
- Seeking temporary relief by lodging a ‘declaration of intention to present a debtor’s petition’ (DOI). This will give you 21 days relief from your unsecured debts. Use this time wisely to come up with an action plan to get out of debt
- Look at more formal solutions such as a Debt Management Plan, refinancing your home loan, Debt Consolidation, Debt Agreements and Bankruptcy.
Debt relief companies in Australia offer a range of financial help and advice including helping you to manage your finances better, how to improve your credit score, as well as more formal options to help you get out of debt such as negotiating with your creditors on your behalf and helping you find suitable debt consolidation loans.
Remember that not all debt relief companies will be suited to you and they can offer a range of different services. Make sure you do your homework upfront to find a reputable and accredited debt relief company to help you. ASIC can help you identify if they’re a licenced financial provider in Australia, while most accredited companies will be registered with a financial or state-based association. Reviews from third-party websites, friends, family and acquaintances can help you find debt help companies with a good reputation.
Debt Negotiators is a registered Debt Agreement Administrator through the Australian Financial Security Authority (AFSA). AFSA is a government department who is responsible for monitoring the insolvency system in Australia.