Alternatives To
Bankruptcy
Here are some alternatives to bankruptcy that are worth considering:
1. Debt Consolidation: With the increasing number of bankruptcies in
Australia every year, many debt consolidation companies have been
created to help you better manage your debts. For instance, these
companies help you decide which debt to pay towards each month while
also giving you a reasonable time frame in which to pay off your debts.
This teaches you financial discipline as well as ensuring that your
debts are in check.
2. Consolidate outstanding debts into your home loan. This can be done
even if you have a troubled credit history. All that is required is
sufficient equity in your property. It is always surprising to us just
how many people forget about mortgage refinance as an option and chose
to declare bankruptcy instead.
3. One of the best ways to avoid bankruptcy is to start budgeting so
that you do not spend what you can not afford to repay. Simply get rid
of unnecessary credit to begin with. Limit your expenditures to your
savings account. Remember that if you can’t afford your repayments, then
you probably shouldn’t take on the expense. If you do have a problem
with financial management, attend some courses to learn those skills,
many of which are given free.
4. Consider a Debt Agreement:
Either a formal or an informal debt agreement can help you come to an
arrangement with your creditors which avoids the need for bankruptcy. An
informal payment arrangement with some of your creditors may extend your
payment terms to facilitate a repayment schedule which you are able to
afford. A more formal arrangement (like Part 9 or Part 10) would be
reflected on your credit history but is still better than declaring
bankruptcy.
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