Are you struggling financially? Are you not sure how you’ll make ends meet or pay your bills on time? If so, you’re not alone. This is a common feeling that many people experience at some point in their lives, and you have options.
If you’re looking for a step to take towards a debt-free future, it’s time for debt assistance. There are numerous debt solutions available in Australia, from debt agreements to loan consolidation to even bankruptcy. While each solution may not be suitable for every financial situation, there’s something out there for you.
While debt solutions can be an effective way to overcome your debts, they aren’t your only option. You might be able to create an informal repayment plan with your lender, seek financial counselling, or pursue another option to fix your debts. It’s all about knowing your options and taking advantage of the best solution for your needs. To explore the full range of debt assistance and what you can expect from it, keep reading this guide.
First, Don’t Delay Taking Action
The first thing to keep in mind when it comes to debt is that you need to act quickly. The quicker you’re able to take action, the more options you’ll have to work with your lender. When should you contact your credit provider or a debt advisor? In any of the following situations:
- You’re unable to pay your debts on time
- You anticipate needing to miss an upcoming payment
- You need to pick between which bills to delay and which to pay
- You’re in the middle of a challenging financial situation (sudden death in the family, divorce, job loss, etc.)
If you’re experiencing any of the above situations, take action. While it can be intimidating to talk to your credit provider, they’re usually willing to work with you. In fact, many even have hardship protocols to provide temporary or long-term relief for those who need it. It’s always smart to keep a small problem from becoming a bigger one.
Consider a Hardship Variation
Once you’ve reached out to your credit providers, you’ll need to explore your options. If you’re unable to keep up with repayments on things like credit card bills or loans, you might be eligible for what’s known as a “hardship variation” from your loan provider.
These are available for anyone who is experiencing hardship such as illness, unemployment, or other change in financial circumstances. During this process, you’ll apply for a hardship variation through your provider, and you’ll need to give new repayment terms based on what you can afford. From there, your application will either be approved or denied. This is a simple debt solution you can handle yourself or with the help of our financial advisors.
Ask for Help with Debt Assistance
There are a number of help options available to you if you find yourself unable to pay your debts on time. While you want to act quickly, it’s also understandable to feel overwhelmed by which path to take forward. You can start by contacting each of your creditors directly, or you can review your specific situation with a qualified debt advisor.
You shouldn’t have to face your creditors alone. In addition, you shouldn’t need to battle the constant calls and letters from your lenders. The good news is you don’t have to. Next, we’ll look into debt assistance options for all situations.
Debt Assistance Options
Now, let’s look into specific debt assistance options so we can review exactly what you can expect from each one. Which type of debt solution you choose will depend entirely on your specific financial situation. This is why it’s helpful to review your situation with one of our financial experts.
- Debt Agreement – With a debt agreement, you submit a fixed repayment agreement or settlement agreement to your lenders. Your lenders can either approve or deny your proposal as a group.
- Informal Payment Arrangements – While a debt agreement is a legal agreement, you can also do an informal payment arrangement by having one of our debt management consultants act on your behalf. Our consultants are skilled in negotiation, and they can help you settle on a new plan with your lenders without a formal agreement in place.
- Debt Consolidation – For some, it’s better to consolidate all of your existing debts into a single loan, usually at a lower interest rate. You’ll no longer need to juggle payments or worry about rising costs.
- Bankruptcy – Finally, occasionally the best option will be the last one: bankruptcy. Filing bankruptcy will free you from most of your debts and allow you the chance to fully recover.
Failing to choose one of these solutions above, or to even take action at all, could have dire consequences. You could face a lower credit rating, challenges getting loans in the future, and even legal action. The good news is there’s an option that’s right for you.
What to Expect from Debt Assistance
What can you expect once you begin a debt assistance program through our debt advisors? This is the easy part. You finally have someone in your corner fighting for your financial future, and that can be a relief in itself. Here are the steps you can expect to go through with your trusted professional:
Step 1. Organise your information.
To start, you’ll need to organise your financial details. You’ll need all of your up-to-date information about your income, expenses, debts, loans, and so on. Bring all of this into your first meeting with your financial advisor, as well as any other information requested.
Step 2. Sort your debts, income, and expenses.
With your advisor, you’ll begin to sort through your debts. You’ll be organising them by who you owe money to, how much you owe, and your interest rates. From here, you’ll also work out your expenses to determine just how much you’re spending each month.
Knowing your debts, income, and expenses will help identify if you’re struggling because you don’t have enough income to afford your debts or you need to budget your finances.
There might be areas you could spend less each month, effectively freeing money to put towards what you owe. On the other hand, you might be unable to squeeze any additional funds from your current situation, and you’re in need of a debt solution.
Step 3. Rebudget your finances.
Now that you have a clear, organised view of your financial situation, it’s time to start building a solution. This means creating a new budget you can afford and stick to. This budget will be important when you’re applying for things like debt agreements or another repayment option where lenders will ask for an updated repayment plan based on what you can afford.
Step 4. Take action.
In this case, your debt management consultant will likely take action on your behalf. They’ll begin negotiating with creditors, allowing you to steer clear of those dreaded phone calls and messages.
However, you will need to take some action on your own by continuing to stick with your new budget. The change will need to happen in your life to overcome this problem and keep it from happening again.
Step 5. Move forward.
You’ll likely have a solution to your debt problem by now, whether it’s debt consolidation, a debt agreement, or another arrangement. You should immediately begin to feel relief by not having to worry about how you’ll repay your debt on time. It’s time to start taking steps towards a debt-free, successful future.
How to Make the Most of Debt Assistance
You now know what to expect from debt assistance, so how do you make the most of it? While debt advisors are equipped with all the know-how to make the best decision for you, it pays to be prepared. Here’s how to make the most of your debt assistance:
- Keep your financial information organised and up-to-date
- Don’t make your decisions based on which collectors are pressuring you the most
- Be prepared to make real changes and sacrifices to meet your goals
- Be honest about your financial situation and admit when change is needed
- Stay open-minded about the best debt solution for you
While debt can be overwhelming, it doesn’t need to take over your life. Staying on top of your debts and taking action early on will go a long way towards helping you reach your goals.
Are You Ready for Debt Assistance?
Debt assistance is a way to get official help in controlling your debt situation. Whether you’re just starting to struggle with making payments on time or feel like you have no way out from under your debt, debt assistance is right for you.
The role of your debt advisor is to help you understand your options so you can move forward with confidence. Having a plan can make the difference between struggling with debt and finally making strides towards a debt-free future.
Are you ready for debt assistance? If so, you should act now. Your credit standing and financial status are at risk when you let the problem grow. Instead, contact one of our friendly debt advisors at Debt Busters today on 1300 368 322. We can help you decide on the debt solution that’s right for your needs and situation. Better yet, together we can make your financial goals a reality one step at a time.