Why Debt Mediation Services are the Right Option for You

Are you tired of dealing with unmanageable debts or aggressive debt collectors? Debt can be crippling and it very quickly descends into a cycle from which it is difficult to extricate yourself. Consumers caught up in bad debts generally find it hard to dig themselves up out of the situation unless they take deliberate measures in order to control debts. One of the best options that these consumers can go for is debt mediation service which is a negotiated agreement between the debtor and the creditor.

It is not the end of the world when you are unable to pay your debts. In Australia, there are lots of legal safeguards put in place in order to protect both the debtors and creditors and it is always advisable to choose these options before it is too late. A debt mediator can make things easy and suggest various options for dealing with overdue debts. It relieves the stress from the process and gives you temporary reprieve.  You can’t afford not to use debt management services given Australia’s recent interest rate increase. Before you know  it, your debts will have spiraled out of control.

What are the Debt Management Options?

If you don’t want to deal with aggressive debt collectors, then there are plenty of debt management options that you can run with including both formal and information debt management solutions. When you are considering a particular option, it is important to be mindful of your current financial situation as well as future financial situations. Take a look at all the options with an open mind before you make your decision. It is always advisable to use the services of a professional debt management solution that can advise you accordingly and help you choose the most logical solutions for your debt management needs.

What are informal options for debt management?

If you are facing a problem with aggressive debt collectors, there are plenty of excellent informal options that you might consider before you opt for the more formal debt agreements which are covered under the Bankruptcy Act.

The most direct option is talking to your creditors. Some will be forthcoming about your financial situation and would be willing to give you some leeway such as more time  to pay your debts, renegotiating on your debt repayments or even agreeing on a settlement which can be a smaller amount than the actual debt amount.

Formal Options

Under the Bankruptcy Act, there are four main formal options that you can consider for dealing with unmanageable debt or aggressive debt collectors. These include the following –

Interim Relief: Under an interim Relief, you can give a Declaration of Intention during which you are allowed to present your petition to the AFSA so that you can be granted a temporary relief. You will have 21 days to seek assistance with your debts. Check at Debt Mediators

Bankruptcy: In case you are unable to make a settlement or compromise with your debtors, you may declare bankruptcy. This will come with both restrictions and obligations.

Debt agreement: This is another formal option that you can choose in order to deal with aggressive debtors. This will be an agreement where you creditors will agree to accept a certain debt amount that you have offered them. It is a legally binding agreement.

Personal Insolvency Agreements: Like a debt agreement, personal insolvency agreements are also legally binding. The debtor will offer proposal to pay the debt either in part or in full. It comes with certain conditions.