The PROCESS involved in the debt negotiation process
HOW IT WORKS:
We will gather information about the client/s, their situation and the history with each debt facilities, similarly to a Fact Find.
Once an assessment is made and if we believe we can reduce the debts, we gather supporting documents from the client. A proposal is submitted to each institution and once a reduced payout is negotiated, the agreed amount is paid out and the balance is written off. The amount paid to each creditor must be paid in a lump sum, not over a period of time. This is the incentive for the bank/institution to take such a large reduction in the debt balance. Please note, the funds to payout these debts must be sourced by the client most commonly via a refinance of their mortgage.
A couple of CASE STUDIES relating to this area of work
MEDICAL ISSUES:
The RC Family had accumulated $100,000 worth of unsecured debt and had fallen behind in their mortgage repayments. An eviction notice was issued. This was the result of ongoing medical costs along with modifications made to the home to cater for one of their 3 children who was mentally and physically challenged.
The RC family aligned themselves with specialist Mortgage Mangers, Fair Go Aussie Loans/Fundsnational Pty Ltd who achieved an Unconditional Approval with a Specialist Lender. This enabled the family to keep their home, a high priority as the modifications to the home were important for the child’s safety. As part of the refinance, their debts were negotiated. The RC family now has a new mortgage which is maintainable due to their credit cards and personal loans being settled for less.
Total Debt: $100,000
Reduced to: $40,000
Saving: $60,000
CHANGE IN INCOME:
Mr & Mrs F came to us with the Sheriff at their door ready to change the locks on their family home. This was the result of several work injuries sustained by Mr F impacting on his ability to earn an income for over 12 months.
With their mortgage in severe arrears and combined credit cards totaling $80,000 there were very few options. Thankfully their broker was savvy enough to consider a specialist lender. A combination of hard work from their broker, consideration from a specialist lender and negotiations from us resulted in the clients keeping their home.
Total Debt: $80,000
Reduced to: $33,000
Saving: $47,000
Part IX and X are both forms of Bankruptcy
Part IX and X are both forms of Bankruptcy. Many companies mask the official term “Bankruptcy” by using the term a “Debt Agreement”. These Debt Agreements are “Formal” and are a binding contract between the client and the creditors, which are managed by Administrators. These Agreements WILL be marked on your credit file and your name will be listed on the National Personal Insolvency Index.
An “Informal Agreement” which is what our company does, is a private negotiation between the customer and the bank which is mediated by ourselves. It has no effect to the client’s credit rating.