Disclaimer – The information provided on these pages is of an informative nature. Please contact us or any other consumer debt firm before you take any action.

Common (and Legal) ways to avoid Bankruptcy

Whilst this is a site about bankruptcy it is important to point out there are a number of options available that a person in debt can also consider. Depending on your circumstances one of these options may be preferable to bankruptcy and in many cases offering a Part 9 Debt Agreement (see below) is a viable alternative for anyone who wants to pay back something as opposed to going straight into bankruptcy.

• The GRANDMA OFFER. This is where a lump sum offer is made to pay out all of your debts at a reduced amount.

EXAMPLE: You owe $30,000.00 on 4 different credit cards. For an easy example we will say you owe each one exactly $7,500.00.

Each creditor is offered $4,000.00 to cancel your debt. They all agree. This means that for $16,000.00 you have paid off $30,000.00 of debt. It’s a good solution if you can get the $16,000.00 from someone.

Why is it called the GRANDMA OFFER? Sometimes it’s a person’s grandma who doesn’t want them to become bankrupt so the grandma helps out. Not all granny’s are rich however!

• NEGOTIATED ARRANGEMENT. This is where arrangements (basically promises from you to the creditor) are agreed upon so that the creditor leaves you alone and doesn’t commence legal action.

This is a good way of dealing with the problem as long as you can keep your promises and the creditor/s don’t change their mind. They can at any time ask you to start paying more. With NEGOTIATED ARRANGEMENTS you have very little Legal Protection. This can cause you problems.

• PART 9 DEBT AGREEMENTS. This is where you get protection under the Bankruptcy act without having to go bankrupt.

 For more information on Debt Agreements click to go to this informative site http://www.fixdebt.com.au

Generally what happens is an offer is made to all of your creditors outlining what you can afford to pay each week. You might pay this amount for 3 Years and then anything else you still owe including all interest disappears and you are now debt free without going bankrupt.

So you pay an amount you can afford for a set time and then you are out of debt. You are protected because your creditors are not allowed to contact you and they are not allowed to take action against you, your property or your wages.    

Contact us if you would like more information on any of these options.

         Phone 02 8916 7409 for NSW callers

         Phone 07 3503 6850 for QLD callers

         Phone 03 9993 0116 for Victorian callers

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