Inevitably at this time of year, our attention is drawn to the dreaded tax return.
Though for some of us, we view it as the answer to our debt problems.
At Life After Debt ® we consistently hear from people who delay dealing with their debt problems in the hope of receiving a nice hefty tax refund to “fix everything”. In reality, if and when individuals do receive a tax refund it is generally not large enough to cover all of the debts or arrears. Our taxation system is set up so that the majority of us are charged the correct rate of tax to begin with – meaning there would be no refund due at all.
Many people struggling with debt feel that if they are unable to pay, then Bankruptcy must be the only alternative. This is not the case. It is important that if you are struggling with your credit card repayments, personal loans, overdrafts, store cards and tax debts, you need to tackle the situation get good debt advice on what your genuine debt relief options truly are;
- Consider Loan Consolidation; If it is affordable, consider paying all of your debts off with one new loan from your preferred lender. One payment will be easier to manage than juggling several different payments. Remember though: just because you want a new loan to consolidate your debts does not always mean the lender will approve it; you will still need to meet their lending criteria credit background and affordability.
- Talk to your Creditors; Communication is the key to working with your lender to overcome short-term financial difficulties.
- Seek Hardship Relief; If you are unable to reach an agreement with your lender, request hardship assistance for debt relief. This will only be temporary but should provide time to consider other debt solutions.
- Consider a Part 9 Debt Agreement; A legally binding arrangement to restructure your unsecured debts into one repayment package where the interest is frozen and you have legal protection from collection activity.
A Part IX Debt Agreement can arrange for one manageable repayment covering all unsecured debts with future interest and penalties frozen. In the case of home buyers, a Debt Agreement can assist with overstretched cashflow in order that you can meet your mortgage and related payments protecting the property asset. The long term effect is that Creditors receive a compromised repayment rather than nothing at all as is the case in many Bankruptcies.
Our team at Life After Debt ® is focused on providing debt management solutions to those struggling with unmanageable levels of personal debt. We have over 50 years experience in providing debt management and restructuring advice so whether you’re in Perth, Sydney or anywhere else in Australia, contact our team today for your free, no obligation initial assessment.