What are the benefits of a debt consolidation loan?

• Manage the ease of paying one single loan repayment per month
• Secure a lower rate of interest
• Shorten the total repayment period

What debts can be consolidated?

• Credit cards
• Store cards
• Other personal loans

Who offers debt consolidation loans?

Typically debt consolidation loans are offered from major financial institution like the big 4 banks in Australia.  We also recommend that you shop around for the lowest interest rate and account keeping fees.  Remember to ask about the account keeping fees and the loan establishment fee as these can greatly affect the effective rate of interest. Not all financial institutions will offer a debt consolidation loan on an unsecured bases ( ie without security), so you may be asked to put up an asset as collateral (like a house or a car).

Will I qualify for a debt consolidation loan?

It is unlikely you would qualify for a debt consolidation loan if any of the following factors are present;

• You have a bad credit record; or
• You have been bankrupt in the last 10 years; or
• You are in default with other loan repayments
• You do not have regular employment.

What happens if I have been refused a debt consolidation loan? What are my other options?

If you have been refused a consolidation loan due to a poor credit history or the financial institution does not believe you can service a debt consolidation loan and you cannot meet your financial commitments, you may need to other options which may include:

• Debt Agreement or a
• Personal Insolvency Agreement.

If you have been refused a debt consolidation loan, you may wish to consider our debt solution services. Remember our advice is free and without obligation, so call us today toll free on 1800 98 10 70, you have nothing to lose!

Australian bankruptcy should be regarded as the last resort to deal with unmanageable debs after you have explored all other options in an attempt avoid bankruptcy like:

• a debt consolidation loan
• a Debt Agreement or
• a Personal Insolvency Agreement

Australian bankruptcy typically lasts for 3 years however it can be extended up to 5 years or in extreme cases 8 years (in total).  Your trustee may ask you to surrender your passport which may limit your travel overseas.  You will also need to all reasonable requests for information from your Trustee and if you fail to fully co-operate with your trustee, your trustee may apply to court to publicly examine you or your associates. You will also most likely lose your personal assets (subject to certain exemptions) and you may be required to make compulsory income contributions.

For those considering bankruptcy you may wish to enquire about a private bankruptcy service by our Registered Bankruptcy Trustee.  Our Registered Bankruptcy Trustee is a Chartered Accountant a member of the Insolvency Practitioners Association Australia and also an executive director for the Debt Agreement Practitioners Association.  A Registered Bankruptcy Trustee can act as the trustee of your bankrupt estate providing you obtain a consent to act prior to filing for bankruptcy.  A Registered Trustee may make the bankruptcy experience more palatable by providing a dedicated case manager that will you can reach at all times. We will also thoroughly explain the bankruptcy process and your obligations from the outset so you don’t fall into any bankruptcy traps.

Please view our Frequently Asked Questions regarding bankruptcy.

It is a streamlined process to consolidate unaffordable debts for insolvent debtors with the protection of the Bankruptcy Act, if your:

• Unsecured debts are < $88 379.20; and
• Equity in assets are < $88 379.20; and
• After tax annual income is < $66 284.4 or approximately < $88,379 (before tax for Australian residents)

The benefits of a DA include:

• Affordable regular payments tailored to your budget;
• Unpaid debt will be legally written off (including interest);
• Binds all creditors into the agreement
• Fixed payment period usually from 3 to 5 years
• We deal with all creditor calls and correspondence;
• Avoids the stigma of formal bankruptcy – allowing you to enjoy the following benefits:
  • Freedom to travel overseas
  • Assets will be protected

A DA is ideal for insolvent debtors who have a poor credit record and cannot obtain a consolidation loan. A DA is a formal legally binding agreement with your creditors and is an act of bankruptcy under the Bankruptcy Act. As such it should not be confused as a consolidation loan.

To read our Frequently Asked Questions about a DA click here.

Remember our advice is free and without obligation,
so call us today toll free on 1800 98 10 70, you have nothing to lose!

It is a streamlined process to consolidate unaffordable debts for insolvent debtors with the protection of the Bankruptcy Act, if your:

• Unsecured debts are > $88 379.20; or
• Equity in assets are > $88 379.20; or
• After tax annual income is > $66 284.40 or approximately > $88,379 (before tax for Australian residents)

The benefits of a PIA include:

• Affordable regular payments tailored to your budget;
• Unpaid debt will be legally written off (including interest);
• Binds all creditors into the agreement
• Fixed payment period usually from 3 to 5 years
• We deal with all creditor calls and correspondence;
• Avoids the stigma of formal bankruptcy – allowing you to enjoy the following benefits:
  • Freedom to travel overseas
  • Assets will be protected

A PIA is ideal for insolvent debtors who have a poor credit record and cannot obtain a consolidation loan. A PIA is a formal legally binding agreement with your creditors and is an act of bankruptcy under the Bankruptcy Act. As such it  should not be confused as a consolidation loan.

To learn more about PIA view our Frequently Asked Questions.

Remember our advice is free and without obligation,
so call us today toll free on 1800 98 10 70, you have nothing to lose!

We have professional and friendly personal debt advisors ready to take your call 5 days a week from 9am to 5pm – Monday to Friday.

Our personal debt advisors will discuss your situation in a confidential and empathetic manner. Our personal debt advisors are here to help you solve your debt problems and set you free from debt. Hundreds of clients have been satisfied with our debt help. Take a minute to view our client testimonials to see how we have helped hundreds of Australians solve their debt problems.

Remember the first phone call is free and without obligation, it won’t cost you a cent so you have nothing to loose by calling us toll free. The first phone call will only take10 minutes and you could be on your way to financial freedom!
We have professional service standards in place to ensure you get the right debt help and advice you can trust.

Take control of your finances today and get the debt help you can trust. Call us toll free on 1800 98 10 70, our initial personal debt advice is FREE and without obligation so you have nothing to lose. Get Debt Free today!

Get Advice

Debt Free will give you friendly and professional debt advice. Our personal debt advisors will always give you debt advice tailored to your individual needs. To assist our personal debt advisors to give you the right debt advice, please have the following information ready to hand when you call:

• Your payroll details (ie after tax payroll details, ie $500 p.w.)
• Current creditor balances (ie National Australia Bank $2,500, Citibank $5,000 etc)
• Current details on secured assets (ie what is your house worth and the current mortgage balance)

If you have all of the necessary information ready to hand we can have your debt proposal drafted within a matter of days and we can get you on the road to becoming Debt Free!

Get Debt Free

We have highly trained and experienced professionals ready to get you onto the road of financial freedom.  If you supply us with all of the information that is required we will be able to draft the necessary documents ready to be lodged with the government within a matter of days. Call us today to see if you qualify for any of our services which will get you debt free!

Let the professionals with a solid track record get you onto the road of financial freedom and help you Get Debt Free – Call us toll free on 1800 98 10 70

• Income;
• Assets; and
• Unsecured debts

These statutory thresholds will govern which personal insolvency product you may be eligible for and will also govern what assets you can retain in bankruptcy and whether you will become liable for statutory income contributions in bankruptcy.

Income Contribution Calculator

These thresholds are updated by ITSA every six months and are indexed in accordance with the CPI.

Debt Free are industry experts and can explain how these statutory thresholds may be applied to your situation and which personal insolvency product is best for you.

To learn more about our products:

• Debt Agreeement;
• Personal Insolvency Agreement;
• Bankruptcy.

Some 6,619 people who were insolvent and unable to pay their bills entered into a debt agreement in the past financial year, new data from an industry regulator shows.

The group comprises 20 per cent of Australia’s 32,909 new personal insolvency cases.

By comparison, 25,981 financial battlers declared themselves bankrupt.

This bankruptcy tally was 400 shy of the all-time high in the 1998/99 financial year.

In that year Australia’s 811 debt agreements made up less than three per cent of insolvency activity.

Federal industry regulator, the Insolvency and Trustee Service Australia (ITSA), has called the debt agreements, where creditors are usually repaid over two to three years, a good news story.

“The thing to remember with debt agreements compared to a bankruptcy is creditors will see a return with debt agreements,” ITSA executive director Peter Lowe said.

“While there might be a number of people in financial distress, a good proportion are able to manage their way out of their predicament.

“Initially creditors were sceptical whether they should support debt agreements. These numbers speak for themselves.”

Debt agreements are allowed if a struggling borrower has not been a bankrupt, has an annual after-tax income of less than $60,200 and unsecured debt of less than $80,200.

The agreements have been around since 1996.

Unlike a bankruptcy, people entering into a debt agreement do not have to surrender their assets.

Debt agreement administrators have to make sure creditors are paid before they charge the struggling borrower administration fees under laws that came into effect in July 2007.

A licensing system for debt agreement administrators was introduced also.

Administrators are still free to set fee rates for developing a repayment proposal.

Fees for monitoring a debt agreement are still charged over the life of the arrangement.

Australian Financial Counselling and Credit Reform Association chair Jan Pentland said it was premature to declare the legal changes a success.

“We’d like to say they are. It’s too early to say,” she said.

Ms Pentland said only one-third of debt agreements entered into between 1996 and 2007 worked because administrators were more concerned about collecting fees than developing the right repayment strategy.

“In the past, the major flaw was there was heavy advertising of debt agreement administrators,” she said.

“Debt agreement administrators made money putting people through the process. The fact is only one-third were working.”

Total insolvency activity grew by 3 per cent in 2007/08.

This was lower than the previous financial year’s 17 per cent pace and the record high growth of 28 per cent during the recession of 1991/92.

Over the past two decades, personal insolvency rates had grown by a trend average of about 7 per cent, ITSA said.

Lehman Brothers chief economist Stephen Roberts said insolvency rates were likely to increase at a faster pace this financial year as unemployment rose.

The statistics reveal the following:

• 11% annual increase in total Personal Insolvency appointments
• 29% annual increase in Debt Agreement appointments

The statistics reveal that many Australians (8,567) in the last 12 months (July 2008 to June 2009) avoided formal bankruptcy by entering into a legally binding Debt Agreement with their creditors.

27,503 Australians couldn’t avoid bankruptcy and were declared bankrupt in the same period.

*Personal Insolvency Statistics sourced from ITSA

Some typically signs of insolvency may include:

• Cannot afford minimum repayments for all debts; or
• Somebody with many accounts in arrears; or
• Debts have been transferred to collection agents; or
• Debts have been referred to the courts for collection; or
• A Bankruptcy Notice has been issued against you.

Not all signs need to present for you to be considered to be insolvent.

You may complete our on-line debt advice module, which will help you establish the best debt solution for you, whether that is:

• Debt Consolidation Loan;
• Debt Management;
• Debt Agreement
• Personal Insolvency Agreement
• Bankruptcy

The possible outcomes may be:

• Debt Agreement
• Personal Insolvency Agreement
• Debt Management
• Consolidation Loan
• Bankruptcy

Remember our advice is free and without obligation,
so call us toll free today on 1800 98 10 70.