"Hi I work for a Debt Agreement administrator. There are 3 ways to end a debt agreement, you pay it out in full, you can apply to have the agreement terminated (however interest backdates from the start of your agreement), or you can offer to make a…"
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debt bankruptcy
I just saw an ad on tv encouraging debt agreements and help with debt.
The company says on their web site quote "The Debt Agreement does go on the public record and your commercial credit reference record. This does not have the same connotations as a bankruptcy and can be viewed in a positive light as you are making a choice to square your debt predicament."
This is a bare faced lie by people who are not qualified in finance. You have to ask, whats in it for them? Ring a lender and see how they view Part IX's
Part IX agreements are worse than bankruptcy. It goes on your credit file for longer than bankruptcy. It ruins your credit history permanently. It will come up as bankrupt even though the debts are paid.
[Companies like] This company will pay your debts and you belong to them . They make it sound very attractive and easy but it will be the biggest financial mistake of your life. It does'nt save your credit rating, it ruins it. You can't get future credit, home phones, mobiles, home leases, start a business, anything where credit is needed.
They will consolidate your payments into small weekly amounts paid to them over a set period of time. They can sell the debt to another company. Even though you pay off the money, you will be bankrupt just as bad as a proper bankruptcy. Don't be fooled, this is very dangerous.
Warn everyone about this. They advertised as Government approved but the Government does not condone this practice.
We spent years trying to clear our financial black mark from an unscrupulous company called Debt Help and the manager of this particular company ran overseas to avoid prosecution.
If you are in trouble, talk to your creditors and work a payment plan until you are in a better financial postion. Get financial counselling. Don't do a Part IX Agreement.
The company says on their web site quote "The Debt Agreement does go on the public record and your commercial credit reference record. This does not have the same connotations as a bankruptcy and can be viewed in a positive light as you are making a choice to square your debt predicament."
This is a bare faced lie by people who are not qualified in finance. You have to ask, whats in it for them? Ring a lender and see how they view Part IX's
Part IX agreements are worse than bankruptcy. It goes on your credit file for longer than bankruptcy. It ruins your credit history permanently. It will come up as bankrupt even though the debts are paid.
[Companies like] This company will pay your debts and you belong to them . They make it sound very attractive and easy but it will be the biggest financial mistake of your life. It does'nt save your credit rating, it ruins it. You can't get future credit, home phones, mobiles, home leases, start a business, anything where credit is needed.
They will consolidate your payments into small weekly amounts paid to them over a set period of time. They can sell the debt to another company. Even though you pay off the money, you will be bankrupt just as bad as a proper bankruptcy. Don't be fooled, this is very dangerous.
Warn everyone about this. They advertised as Government approved but the Government does not condone this practice.
We spent years trying to clear our financial black mark from an unscrupulous company called Debt Help and the manager of this particular company ran overseas to avoid prosecution.
If you are in trouble, talk to your creditors and work a payment plan until you are in a better financial postion. Get financial counselling. Don't do a Part IX Agreement.
Note: edited to remove a company's name
Views: 1363
Replies to This Discussion
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Permalink Reply by JeffK on -
Hear hear, nikki. Wherever there are people in trouble with debt there will be sharks trying to gobble them up. NEVER use companies like this, no matter how desperate you may be. As nikki points out, while you may things things have been sorted out in the short term they will make the situation MUCH worse over the long term.
JFK
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Permalink Reply by denise on -
Nikki's comments are slanderous ie 'This is a bare faced lie by people who are not qualified in finance.' Every Debt Agreement company MUST have at least one registered Debt Agreement Administer with ITSA. By the way ITSA send their auditors to every debt agreement company to ensure they are doing the right thing by clients. DO NOT CONDEMN ALL DEBT AGREEMENT COMPANIES JUST BECAUSE OF ONE DODGY ONE FROM THE UK? and do not single out one debt agreement company when there are many out there?
What help can a someone get if they are paying off a house and in danger of losing it due to drowning in credit card debt????? Why do you think John Howard introduced debt agreements???? What is your suggestion?? Lose the home and declare bankruptcy. If a debt agreement is the same as bankruptcy why did the government introduce it?????? YES it came through a GOVERNMENT LEGISLATION and definately condoned by them!
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Permalink Reply by Miss Money on
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Nikki - get ya facts straight!
I have had experience in this area and can categorically say Debt Agreements - whilst part of the Bankruptcy Act - is not bankruptcy! A Part IX is listed on your credit file for the SAME LENGTH OF TIME as everything on your credit file - including defaults, judgements, and even just general credit enquiries by lenders. This period is 7 years.
Part IX agreements ARE NOT worse than bankruptcy. Bankruptcy will run for at least 3 years (some case could be longer) and remains on your credit file for a further 4 years after discharge (to a total of 7 years) - AND you will permanently be recorded as a bankrupt on the National Personal Insolvency Index.
A Part IX agreement means that while you cannot meet your current commitments, you ARE making the best possible effort you can to repay your debts. Bankruptcy means you do not. This is widely recognised - which do you think lenders would prefer given those 2 options??? Getting some money back or none???
In a part IX debt agreement, you can still get a rental agreement / phones / credit / etc but obviously your choice of lenders will be limited - I can give examples but not in this forum. Ex-bankrupts will find their optiond even further limited !
Part IX debt agreements are heavily regulated by the Insolvency and Trustee Service Australia (a government department) and are completely condoned by them.
I appreciate you may have had a bad experience but do not try to rule this option out completely for everyone - it is a far better choice than bankruptcy for most people.
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Permalink Reply by nikki on -
I do have my facts right
My husband had a Part XI until we paid it out in 2005 (3 years early). We didnt know he waslisted until we approached Telstra for a Post paid phone. Guess what? Declined as listed as Bankrupt. Then we applied for a lease, You have to sign a declaration that you are not insolvent or listed, discharged bankrupt. Oops, sorry can't rent you a house especially when others applying have clean history. This is fact. Could'nt rent from radio rentals either. Same reason. We ended going to ITSA about our dilemma as we could'nt understand why he was listed as the Debt Help rep told him his credit rating would be saved and it would look good to lenders that he paid it off, (all $5000. ) They referred us to the Finance Minister. It ruined my husbands Credit rating. He still cannot get a Credit Card. He earns very good money, paid off 2 homes but can't have a credit card, post paid phone or rent anything. The Part IX overrides everything. Speaking from experience. It is very, very bad. We were fortunate in that the Company Debt Help went insolvent and was being chased by ITSA for dishonest practices. Setting up Part IX agreements as the advocate for piddly amounts of money and using false income statements to get the lenders to agree to hardship. Our own Bank Managers brother was done by this company and others are doing the same thing. Yes, there are people who may benefit from a part IX but they should be fully informed of the long term consequences. These companies should not advertise that it saves your rating. Banks run a mile when they hear Part IX even when you explain that the debt is paid unlike a Bankruptcy. If ITSA heavily regulates Part IX's why do they allow unqualified vultures like these Debt companies to operate? Don't you agree?
My argument is the criminal scabs who encourage desperate and ill informed people to do a Part IX for the wrong reasons, profiting from it and misinforming people. I can assure you it is as bad as Bankruptcy. My advice is to get impartial advice from professional financial councillors before agreeing to Part IX.
That is my argument, be informed, get professional advice and use a reputable advocate recommended by ITSA. Not a debt reduction company that advertises on TV on a Sunday afternoon. Make sure its the right and safest thing for you to do.
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Permalink Reply by Miss Money on
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Sorry to hear you have been bitten so badly.... I agree with the majority of what you have explained now which was slightly different to your original comments. You may not know that now debt agreement administrators are required to be formally qualified in order to practice... hopefully others will not suffer as you have done and will be fully informed when they do make their decision... as you stated, there are some unscrupulous vultures out there but thankfully the majority are not. Good luck.
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Permalink Reply by nikki on
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Thanks for your comments.
We were lucky, saved hard and bought our first home 3 years ago. The bank manager I mentioned listened to our story, read our evidence and gave us a go. Thanks to him, we have'nt looked back. We currently have 2 homes, just sold our other rental at a good profit and own two cars. Still have no unsecured credit but even with paying out cars and home loans are considered too risky by credit companies. The phones are in my name as hubby still can't get credit. Go figure?
It's been hard but worth it and a steep learning curve.
I read alot of financial stuff like this forum, domain and money sites to stay informed about finance and debt management. Thats how we made our success.
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Permalink Reply by denise on
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You sound bitter because YOU had a bad experience but there are many people who have had good experiences like a couple that were told to go bankrupt as they had so much debt. Instead they went into a debt agreement, paid off their debt and then saved. Seven years later they walked into their first home. They said that never would have happened if they didn't go into a debt agreement. Please don't condemn a company who tries to help people and advertises on a Sunday arvo to reach people who may be helped through a debt agreement. Would you condemn all debt agreement companies?'
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Permalink Reply by Sophia on
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Hi Nikki so basically ur husband did apply for debt agreement but it was showing as a bankruptsy on the credit file , thats scary as even I was planning to apply for debt agreement but my husband is stopping me to do this. I am very confused I have more than $80000 debts including credit cards and personal loan and have a baby as well.
Wat would u suggest ? If I apply for debt agreement will that be a best option or just not to pay to the creditors and get unpaid defaults on ur credit file as applying for debt agreement will anyway give u that Bankcruptsy stamp on ur credit file.
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Permalink Reply by mike on
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Sophia,
i totally understand your situation, i am currently going through the same process i also have just under 90k, one debt agreement place said they can do a part IX and there words where they can amend the application under the 83k which is required for the part IX, i spoke with my accountant and independant financial advisor they all suggested bankruptcy, which i am now currently doing. I also spoke to my creditors prior they didnt give a stuff, one person i spoke to at GE said i am eligable for 3 month monotorum i did everything the guy said put $500 on the the account only to be called 2 days after making the payment that they require the rest and i do not qualify for financial hardship assistance now i am being told they will be issuing me with a sumons.
if they take judgemet against me and in your case against you if you do not pay anything they can then start to seize goods even my kids goods, bankruptcy protects your household items. and if they cannot find you judgement can be extended up to 11 years sooner or later you will pop up then they will get you.
even though im not saying bankruptcy is the best thing in my situation it is, i know it will be a hard road but its not the end of the world. at the end of it it will be about re-proving my credit worthiness even if it means going to the bank with $1000 and using that $1000 to get a $500 credit card, i have been told this can be done. then rebuilding my credit history.
have a look at this website www.fredappleton.com.au
yes bankruptcy has some impacts ie you cant travel overseas without permission but its not impossible. my accountant has a client who had gone bankrupt and it wasnt the end of the world he mentioned bankruptcy is about being smart and being up front with itsa.
part IX agreements are another form of bankruptcy you will still have the same issues as going bankrupt except the leash is longer ie you dont need permission to go over seas etc.
in your situation with what you can currently afford would have been the same as mine it would have been a 7 year agreement with unrealistic payment plans this same mob who said they can do my part 9 also wanted 2k to do bankruptcy and they wanted the payment before they lodged it and the same with the part ix but it was more expensive.
as i said I know where you are coming from the people who are say bankrupcy is the end of the world obviously dont know, my accountant said the client he has who has gone bankrupt is in a much better position now than he was before.
I know its not the best feeling in the world you try to do the right thing and they push you into a corner. i had one creditor which i paid out two years ago i called up to cancel the card and they mentioned i have just paid the annual fee and to keep it for 12months, stupid me did and thats when things got bad, i got ill, i lost my job went from an 95k per year down to 37k but yet i stayed in front but sacrificed alot of things along the way my accountant even said i should have gone bankrupt a year ago but i tried to do the right thing
anyway to the point if your in that sort of situation you seriously need to look at the big picture as i did whilst my option may not be the best you sound like a very similar scenario as what im facing.
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Permalink Reply by Maria on
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Hi Mike
After reading ur reply to Sophia , I could also feel that I am not alone.
I would like to ask u few things abt bankruptsy. Me and husband has credit cards and personal loan debts of 85K on top of that last year we also got another loan of 3,50,000 to buy a house which we did buy. Now its so hard for us to pay the mortgage and the debt. I am really worried and wants to know if we file bankruptsy can they also take our house or we can file bankruptsy but we can still pay the mortgage since we can somehow manage and pay the mortgage but not the debts of (credit cards and personal loans 80K minimum monthly payment)
IS IT possible ? or If we file bankruptsy we will also have to give up or house.
Another question Can this possible that only I file bankruptsy on my name but not husband ?
thanks
Maria
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Permalink Reply by nikki on
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Sorry Maria, I have been offline for a while and only just got your message. Ok, How much is your house worth in relation to your loan EG: the equity in it? if you have equity enough then you may be able to consolidate to reduce the amount of repayment but you should pay more on top to pay it off. Or you could consolidate the personal credit loans and credit cards with an equity loan (not including your mortgage) into one loan and reduce the repayments per month as you are only paying 2 loans not 3 so saving on interest but do not use the credit card again until you have paid off the loan.
Yes you will have to give up the house in bankruptcy as it is a sellable assett. I advise going to a financial counsellor asap with all your loan details and find a solution that fits your individual circumstances. lifeline, St vinnies etc can all point you in the right direction to help relieve the financial pressures you are under right now. Bankruptcy is a last resort and has very serious long term consequences for you. be informed.
Let me know how you go ok.
All the best
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Permalink Reply by nikki on
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Hi Maria
It will only affect hubby if he is a co borrower on the loans.
Bankruptcy should'nt stop you getting a job unless it's in a bank, real estate, car sales and some government jobs. Yes they would take your house but I don't understand how the bank would preaaprove for a home loan. You see, credit card debt, even if it has nothing owing on it reduces your borrowing capacity by the same amount ie: You can borrow $1000000 but have credit cards value $10000 then you have the loan approval reduced by the $10000. that is $90000. I would not consider purchasing a house until you can manage your other debts. if rates rise, and its not a matter of if but when, have you got the capacity to cover up to $60 pw more? Plus rates, insurance etc. Start paying down all your debts starting with the highest interest rate first. Then put the extra from your first debt into the next and so on. Its the only way. there is no quick fix. A Part 9 may be the answer for you as you have no assets and large debt. Call ITSA, they are in the phone book and request info on Part IXs. Don't take on any more credit until you have sorted it all out. I am so sorry for your situation. Please let me know how you go. All the best :
Latest Activity
Cliff Mearns replied to Cliff Mearns's discussion Bankruptcy -v Debt Agreement"Ben, let's not lose the loop. How financiers view bankruptcy is not relevant to the discussion of an individual's capacity to pay something. Bankruptcy is being utilised as a means of evading debt obligations. "
Bankruptcy ben replied to Cliff Mearns's discussion Bankruptcy -v Debt Agreement"I agree with the setiment however in reality there's nothing to encourage an individual to make a payment with a Debt Agreement! While technically it's different most financial companies regard it as the same as bankruptcy."
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