I researching for this site I found https://www.moneysmart.gov.au
This site is a wealth of information. It really says a lot of what I would say therefore why reinvent the wheel when the wheel is perfect as it is.
This section is brilliant. Dealing with debt your rights and responsibilities!
https://www.moneysmart.gov.au/media/400182/dealing-with-debt.pdf
What I would like to say is you’re not alone, the biggest issue people have is that they feel it’s just them, or they will be judged. NO the only reason I even “knew you” when I was debt collecting was if you mucked me around or if you didn’t stick to an arrangement we had and it was broken constantly.
I was often personally abused but never took it personally as I felt they would have said what they said no matter whom called them about the debt. However it is important to note that if you abuse the debt collector, well it’s not fair, they’re just doing their job and trying to pay their own bills.
People get into debt for various reasons, first rule of any budget or issue, much like going on a food diet is DO NOT DEPRIVE YOU, so pay you first, have some family or play money, about 15% of your salary, Google for events and things to do for free, look at what can I sell, what work can I barter, how can I get extra cash.
Stand back from your position and try if you can to look at it unemotionally, I get that it is easier said than done however by looking at your situation as if you’re not involved you may come up with solutions. Tell your mates and friends, I guarantee you many if not most are in the same position. Hold a dinner party and each person brings over a meal to share and workshop ideas to help with debt, you will be so surprised at what you can achieve with a collective brain.
Above all there is light at the end of the tunnel RESEARCH, research and Research, DO NOT just take the first person who says I can help, let’s go bankrupt, let me fix your credit file. For every person offering to do all this for money there are agencies offering this support for FREE or simply do it yourself.
Remember the biggest aspect to your life is your self worth, your family, your sanity and in the end of it all we are a long time dead, what is the issue today may not be an issue in 2 years.
Some helpful hints and Methods to help you through this time!
The first rule about being in debt to someone is: ALWAYS TELL THE TRUTH!
DO NOT IGNORE YOUR DEBTS
- Never lie or make up a payment plan that you cannot stick to.
- Don’t be embarrassed as many people are in the same position. If you make a deal stick to it and be honest, you will be remembered for your integrity as opposed to someone who promises to pay then never keeps his word.
- If you make a deal and you know one month is going to be difficult then contact your creditor BEFORE he tries to obtain payment (if it is a one off problem then I’m sure that they will understand).
- If you have purchased stock then ask the business if they would consider taking some of the stock back for a credit on the account.
- Ask if you can do any manual work or exchange work for payment. I know of a case where an electrician had money problems and went to his creditor, a builder, and he worked off his debt by installing electrical work on his building sites. Another example was when the debtor’s wife was a hairdresser, and with the debtor’s wife’s permission they settled on an account at the hairdresser for the creditor’s wife to use as payment of the debt.
- If you are going out of business or will NEVER be dealing with that creditor again then perhaps you can offer a lesser amount as full and final settlement. For example, if $5,000.00 is owed then offer $3,000.00 as a full and final settlement. If a settlement is reached you must pay the account in FULL. Do not reduce the debt then offer to pay off the reduced amount in instalments. This full and final works, as some businesses prefer to write off a balance against tax, rather than continue to try and collect on an account in dribs and drabs. Full and final is also used as a last resort to avoid going into liquidation or bankruptcy. Creditors in the end would rather receive 50% of something as opposed to 100% of nothing. You must also be careful not to take this mode of payment reduction, then close down your business and open the same type of company again in 6 months. In this situation your creditors would probably not be too happy with supplying you credit again, and could try and recover the full amount owing (they could inform other suppliers of your previous credit history and dealings).
- This full and final payment can also be introduced after you have paid off a account for a period of time and still have a balance left over and you now have the funds to finalize your accounts at say 50 cents in the dollar
- If you are in financial trouble, but have enough equity in your home you could look at re-financing your home loan into a line of credit loan, that you can then draw down for payment to your creditors. I personally do not use a line of credit loan, as you have to be a very strong, self disciplined person, as the funds are so easily accessible by yourselves.
- ABOVE ALL ALWAYS KEEP YOUR CREDITOR INFORMED OF ANY CHANGE OF ADDRESS OR OWNERSHIP OF THE BUSINESS, OR OF ANY POSSIBLE DELAYED PAYMENT. IF YOU KEEP YOUR CREDITOR INFORMED AND STICK TO WHATEVER YOU HAVE AGREED UPON THEN YOU SHOULD NEVER HAVE A PROBLEM.
- Do remember though a creditor does not have to accept a part payment plan or any deals but if you are honest and up front, you should not have any problems.
We have put together a list of local contacts and people we recommend here – Local Contacts
So where I go then to get help
Financial Counselling Australia (FCA) for details of financial counselling organisations around Australia, visit the FCA’s website. www.financialcounsellingaustralia.org.au or call the National Financial Counselling Hotline during business hours on 1800 007007.
For an up-to-date list of financial counselling organisations, you can also go to ASIC’s consumer website, MoneySmart. www.moneysmart.gov.au or call ASIC’s Info line on 1300 300 630
