A Step Towards Success

Each financial year, more than 10,000 Australians enter into a Part 9 Debt Agreement to avoid bankruptcy and get out of debt.

Debt stress can impact on all areas of a person’s life, causing problems in relationships both at work and home.  To break free from that state of hopelessness, and getting your life back on track, is no easy task but it is possible.  There is relief available. 

Identify and accept the debt situation
The first step is usually the hardest one but realising and accepting you are experiencing a bad debt is acknowledging you have a problem that needs to be fixed. Money management skills and budgeting is something we need to learn and unfortunately, some people will struggle all their lives with money issues.  People too often wait until they are so far behind with their repayments before seeking help.  They don’t always realise the seriousness of their situation. 

Some signs you are starting to fall behind with debt are:
  • you are paying bills with your credit card because of poor cash flow
  • you are more than 1 month behind in paying your bills
  • you don’t know when bills are due
  • you are consistently left without money before pay day
  • you can’t save any money
There are a number of solutions available if you are struggling with debt.  The sooner you ask for help, the more options you have available.  If you ignore the matter, not only will your options become limited but may also include long lasting consequences.
Finding the solution
When you enter a Part 9 Debt Agreement to avoid bankruptcy and get out of debt, you are able to negotiate a repayment schedule with your creditors. Often this means people will only need to repay a percentage of their full debt amount over a set period of time. Because they are still trying to repay the debt, all the harsh consequences associated with bankruptcy are not enforced.  Other debt relief solutions include an informal debt agreement, a debt consolidation loan or ultimately, bankruptcy.  Each of these solutions comes with their own various consequences and eligibility criteria.
Once you have found a way out of debt and complete the necessary steps to get yourself out of debt, you are then free to move forward with your life.  Your debts are repaid and you can start to work on rebuilding your credit file. This is when you may need to ensure you don’t fall back into your old habits.  This is the ideal time to create a budget, now what debts and bills are due and plan ahead so you will have money to pay them.  You may even be eligible to apply for finance and this will improve your credit file over time. But most importantly, learn from the experience and change your habits.  Know your limitations!