Why a Debt Repayment Agreement Could be a Good Idea

Anyone can fall into financial difficulty. Remember, debts are not destined for a particular group of people only. When an individual finds it is impossible to offset certain loans and credit cards as previously agreed to with lenders, there are plenty of options available for people in debt and one of them is a debt repayment agreement. This mode of debt settlement plan has various solutions for different debt situations.

debt-repayment-agreement

The debt repayment agreement was designed by the Personal Insolvency Act that was enacted in 2012 for people finding it hard to offset personal debts. The arrangement runs for five years, though under certain circumstances, it could be pushed to six. Many people in debt often explore the possibility of using this method to pay off unsecured debts when in financial hardship.

Even though the debt repayment agreement is one way to settle those nagging debts, not everyone qualifies. Before deciding to go for it, there are certain questions someone must answer.

  • Do I qualify?
– This arrangement is for people with unsecured debts and no ability to pay off these loans or credit cards for the next five years or more. Although a borrower with secured debts may apply too, remember only the unsecured ones will be catered for. Secured debts are those borrowings with certain goods or property attached in case of non-payment. If at all a borrower fails to pay off the debt, the property that acts as security is taken away or auctioned. – An individual is only entitled to one debt arrangement plan at a time. In case one has another debt resolution plan underway, it is not possible to be allowed into another agreement to repay debt. – A consumer must have resided in a given state for a year or more, or be domiciled there. Alternatively, one may be having a business in the state.
  • How Do I Go About a Debt Repayment Agreement?
– A borrower is supposed to make a proposal through a PIP or Personal Insolvency Practitioner. This proposal must first of all be agreed to by the borrower and then approved by creditors at a meeting. If there is a unanimous decision between the parties, the borrower is obliged to make regular payments to the creditors through the PIP who will then distribute them according to the terms of agreement. – During the course of the agreement to repay debt in Australia, the creditors have no right to force a debtor to make any other payments apart from that which was agreed upon. Of course this applies if a consumer sticks to the repayment plan. In case the borrower does not, then another meeting may be convened.
  • What a DRA contains
– The duration of the period of payment is a maximum of five years, though an extra year may be incorporated under certain circumstances. – In case an individual honors the terms of agreements, remaining debts covered under the DRA may be discharged. – A consumer is supposed to remain with sufficient amount of money to fend for dependants and self. – There must be an indication of how the debts are to be repaid in the event of death or incapacitation. Managing huge debts can be a tough venture. A borrower could seek assistance through debt helpline debt repayment agreement. There is no need to suffer in silence as there is always a way out of debts. For more information, visit at https://www.debthelpline.com.au/debt-solutions/debt-agreements/

Importance of taking up insurance cover for tax audit

In Australia, the law permits the Australian Tax Office (ATO) to randomly select any business enterprise or other types of organizations and conduct a special tax audit of accounts. Normally, on the basis of the tax returns and accounts submitted, the ATO identifies the business enterprise for random audit. However, for this random audit, you will have to bear the expenses of audit fee and other charges, if any. Normally, the audit charges are considerably higher and these naturally affect your profit margin. In such a situation, you may contact any audit insurance company and take out a tax audit insurance policy.

Services of professionals

Once, your business enterprise comes on the scanner, the ATO will descend on your office without prior information. During the course of audit, the ATO may require you to present all the books of accounts and other relevant records. The ATO may even conduct an enquiry on various aspects of accounting and taxes that are shown in your annual accounts and tax returns. If you or your staff members are not fully conversant with the tax and other related laws, then you may have to avail the services of an attorney and chartered accountant to provide suitable clarification to the issues raised by the ATO. In fact, in some cases you may also have to avail the services of actuaries or cost accountants to help you provide suitable clarification to the ATO. For all these services, you will have to pay for the services of these professionals.

Unforeseen expenditure

Apart from these, in some cases, the ATO may also direct you to recast your accounts. In such cases, you may also request your staff to work for extra hours so that the recasting of accounts is completed within the time stipulated by the ATO. Therefore, as you can see all these involve a considerable expenditure. At the same time, this being an unforeseen expenditure you would not have made any budget provision towards the tax audit by an ATO.  In order to meet such contingencies you may look for an audit insurance company and take out the tax audit policy.

read more

How to Deal When You’re Choking from Debt?

If you’re in debt, you are not alone. But the level of debt is not the same. Some people manage to handle their debts with ease while still living a decent life. However, some are overwhelmed with debts that their quality of life has decreased immensely. If you belong to the second category, then you might feel like you are choking from debt. It could result from credit card debt piling up, or other financial woes, you have to keep a few things in mind to ease the burden a little.

Understand the Source of Problem

Is it lack of income to pay off your debts? Is it your spending habits? Is it lack of discipline? Whatever it is, you must be able to identify what is causing you financial difficulty and hardship. Your financial problems will not fix itself. You need to get rid of habits that is resulting in an unhealthy cycle of debt repayment and debt acquisition. If you don’t, not only will the cycle continue but it will result in irreversible damage.

Escalation of Commitment

If your credit card debt piling up is starting to overwhelm you, you need to study the concept of escalation of commitment. This concept refers to a pattern of behavior that aims to rationalize your decisions when faced with adversity rather than changing course. To get rid of debt, you should be open to try out new ideas. If the previous strategy did not work, you cannot afford to go with the sinking ship. Admit your mistake and work on it. Stop doing the same mistake over and over again. This is the only way you can break the cycle.

This is also an important reminder for anyone considering filing for bankruptcy. There is an alternative to bankruptcy and you should never take the easy way out as you could suffer bigger consequences.

Seek Credit Counseling

When you see your credit card debt piling up, you might enter into a denial state. Your reality is too harsh that you simply do not want to confront it. You must avoid that mindset. This is partly similar to the concept of escalation of commitment. You need to seek help when you need it. Credit counseling is a good first step. These professionals can provide you insight into the source of problem where you are blinded by it. They can help set up payment plans or help with applying for a debt agreement. They can also motivate you to keep going just when you think your debt problem is insurmountable. See more at Debt Helpline

read more

Hard Money Loans: 5 Steps That Increase Its Approval Probabilities

Do you have a real estate you intend to develop, but you are financially stuck? Well, you should think hard about a hard money loan. This loan is different from conventional loans whose main lenders are credit unions or banks. Private investors usually fund this loan and its repayment period can be extended from one year to 5 years depending on certain conditions. Most hard money lenders mind about the value of the borrower’s property more than they consider their credit. However, the application of hard money loans requires you to:

hard money

Present the prospective value of the property you intend to buy

The hard money lenders will finance you depending on the collateral value of your property, but not your credit score. This will require you to present the lender with your contractor’s bid sheets, architectural property plans and complete renovation and repair budget. Although these loans are mainly given to seasoned developers who purchase properties and then refinance them, first time buyers are also eligible applicants. However, first time buyers should be willing to give information about the neighborhood’s growth projections, market history and the prices of similar neighborhood properties.

Give your investors a comprehensible financial plan

Borrowers should know that most hard money financiers usually fund about 60-70 percent of the home’s after-value-repair (ARV). The lenders expect the borrowers to finance the remaining 30-40 percent. Borrowers with this 30-40 percent cash at hand have higher chances of hard money loans approval. Those who don’t have this cash in hand may have lesser chances of getting this loan especially if they don’t own other properties that the lenders require.

Get additional documents ready

It’s true that most lenders may mainly require knowing the value of the property you wish to purchase. However, they may also require you to present additional financial information. This could involve additional documents such as bank statements, credit history and pay stubs among others. Many lenders are more confident with borrowers who present such valid additional documents.

read more