If you are like the many who have been struggling with debts and were thankful for the relief given by the government. This news is not good (make sure you are sitting down).
All government relief will end on the 1st January 2021. This will mean that debt collectors will begin knocking on the door and chasing you for outstanding debts.
Act now to speak with a Debt Solutions expert to find out what your options are. Doing nothing will not change the situation and you will feel like running a marathon without a finishing line.
It’s time to act and get rid of the stress that debt brings. Armada provide a FREE ASSESSMENT for all people who reach out to Armada. This is for both personal and corporate debts.
Below is the official statement from the Australian Financial Security Authority (AFSA).
Temporary debt relief measures will be wound back on 1 January 2021
In March 2020, the Australian Government announced a series of changes to bankruptcy law, as part of the wider economic response to the COVID-19 pandemic.
The temporary changes included:
As of 1 January 2021, those temporary changes will cease. An amendment has also been made to adjust the bankruptcy threshold. This means:
Before the temporary changes were implemented in response to the COVID-19 pandemic, the minimum amount of debt that could trigger a bankruptcy was $5,000.
The government has amended the bankruptcy regulations to adjust the threshold for petitioning bankruptcy to $10,000 or more.
– Ends –
What to do? – If this sounds like you or someone you know, speak with a debt solutions expert as soon as you think you may need to get a payday loan. There are many formal and informal debt solutions available to everyone, especially if you are struggling and are feeling that your head is just above water.
THE FINAL WORD – At Armada we are proud of what we do. We are a family business and built on family values. We will give you the honest solution, even if it isn’t what you want to hear. We do that because we know what you are going through and we know how good your life will be after the debt solution is in place.
Armada offer a FREE ASSESSMENT to every client. This is done with NO OBLIGATION. If you want to get a FREE assessment click here and one of team will be in touch for a chat. It’s that simple.
In the office we have recently spoken to many potential clients who are reluctant to go into a debt solutions as they feel a duty to ‘do the right thing’ by their creditors (people they owe money to).
The Armada team spend a lot of time trying to make our clients understand that the most important person in debt issues is you and your family, not the creditor. We know that if you could afford to pay the debt off, you would. However now more than ever, situations have changed. Jobs have been lost, we have gone into recession and Australia has changed. This is not your fault.
The point I want to make is that Payday lenders are big business, no matter how caring they seem. I would like to direct you to the following information that was brought to our attention by Channel 9.
“A pay day lender is in hot water with the corporate regulator after allegedly raking in $78 million in fees from customers.
Cigno Loans allows customers to borrow up to $1000 with most signing up online and being approved within minutes.
But the fees charged are allegedly huge, with some customers claiming they have paid back nearly 1000 per cent on their loans.
Tikyah Amber Boyce borrowed $175. She claims she was told she’d end up paying back around $300. Now she owes more than $1000.
Ms Boyce told A Current Affair she set up automatic payments of $94 a week; but on the fourth transaction they took double.
“I noticed they took $188, which was definitely not the $94 they said they’d be taking out,” she said.
Ms Boyce thought she’d paid back the loan and stopped hearing from the company, until debt collectors started calling three months later saying she now owed $1135.
The huge amount was made up of weekly account keeping fees of $5.95 and $79 default fees.
“I was a bit shocked. Unemployed, living with my family it didn’t cross my mind how I was going to get the money to pay it back,” she said.
Alisha Hayden also used Cigno Loans when her dog was rushed to the vet and she needed cash fast.
She secured a $500 loan thinking she would pay back around $850. She too realised Cigno had taken extra payments.
“I said ‘can someone explain to me what’s going on, I’ve paid back $1200 so far and you’re still taking payments out’,” Ms Hayden said.
She claims the company then told her she owed a further $500 in default and account keeping fees.
When she told the company she wouldn’t be paying it, she claims they made an offer for her to pay just over $200 for the matter to be finalised.
All up she paid more than $1400 on a $500 loan.
Cigno Loans is no stranger to controversy.
Last year ASIC went after the company, lodging a product intervention order.”
Many people think that these type of loans will be used to pay back debts by consolidating their debts into one affordable payment. The problem is that it turns into not being AFFORDABLE very quickly, which is where the problems starts. Another thing, which all debt solutions experts know, is that if you have a payday lender (Short term / High interest) loan, most big bank lenders will not offer you finance.
What to do? – If this sounds like you or someone you know, speak with a debt solutions expert as soon as you think you may need to get a payday loan. There are many formal and informal debt solutions available to everyone, especially if you are struggling and are feeling that your head is just above water.
THE FINAL WORD – At Armada we are proud of what we do. We are a family business and built on family values. We will give you the honest solution, even if it isn’t what you want to hear. We do that because we know what you are going through and we know how good your life will be after the debt solution is in place.
Armada offer a FREE ASSESSMENT to every client. This is done with NO OBLIGATION. If you want to get a FREE assessment click here and one of team will be in touch for a chat. It’s that simple.
The Morrison Government will undertake the most significant reforms to Australia’s insolvency framework in 30 years as part of our economic recovery plan to keep businesses in business and Australians in jobs.
The reforms, which draw on key features from Chapter 11 of the Bankruptcy Code in the United States, will help more small businesses restructure and survive the economic impact of COVID-19. As the economy continues to recover, it will be critical that distressed businesses have the necessary flexibility to either restructure or to wind down their operations in an orderly manner.
Key elements of the reforms include:
This means: If you have debts less than $1million you are eligible to enter into this new insolvency structure.
This means: As a business owner you will still remain in possession or control of your business while you work with the practitioner to assess and design a possible solution. You can continue to trade, keep the doors open and employee staff.
This means: You will have 20 days from appointing a practitioner to work together on a suitable plan to present back to the people you owe money to (creditors).
The reforms will cover around 76 % of businesses subject to insolvencies today, 98 % of whom who have less than 20 employees.
Together, these measures will reposition our insolvency system to reduce costs for small businesses, reduce the time they spend during the insolvency process, ensure greater economic dynamism, and ultimately help more small businesses get to the other side of the crisis.
On 22 March 2020, the Government announced temporary regulatory measures to help financially distressed businesses get to the other side of COVID-19. On 7 September 2020 the Government announced a further extension of this relief to 31 December 2020. The new processes will be available for small businesses from 1 January 2021.
This reform is brand new and the government are writing the legal framework as we speak. You still need to be confident in making profit over a period of time in order to satisfy your creditors. Armada and their trusted partners can point you in the right direction.
Lots of businesses are struggling because of COVID. You’re not on your own. We’re all not sure what the future holds but this is a positive direction by the government as they try to assist businesses who have stopped or reduced trade because of COVID.
This not a “one size fits all’ solution. You need to be up to date with ATO and employee entitlements to access this specific solution.
This is why you must go to an expert who can assist you in getting everything in place to get the best outcome for you and your business. Armada offer a FREE ASSESSMENT for all enquiries. This way you have nothing lose and everything to gain. Doing nothing in not an option and having an exit strategy and a direction can be the end to the months of worry and sleepless nights.
Armada are here and available to talk. Armada can walk you through a FREE ASSESSMENT to see what is best for you. Just click here to learn more and have an Armada team member contact you for a quick chat.
There are many statements about the family home, such as ‘home is where the heart is’, ‘home sweet home’ and ‘there is no place like home’. This is because the family home is where cherished lifetime memories are made.
The family home is also often the single biggest asset available to a trustee in many bankrupt estates. Understandably, the biggest fear of any individual who is struggling to pay their debts is losing their family home. It can represent the worst consequence of financial failure bringing distress and displacement to not only the insolvent debtor, but also the family who is affected by the financial failure.
To the ordinary person who has little or no knowledge of bankruptcy laws, the natural reaction to financial distress is panic and fear and this is why the first question someone considering bankruptcy may have is, “what will happen to my home?”.
On the other hand, creditors seeking to recover their debts are faced with the predicament of initiating bankruptcy proceedings against a debtor which could be costly and ultimately, not commercially favourable. An unfavourable outcome might arise where there is minimal equity in the debtor’s family home or there is likely to be difficulties in a trustee entering into possession of the property. An example may be resistance from a non-bankrupt spouse of the prospect in a family law proceeding.
Fortunately, the sale of the family home is not the only option available to a trustee in recovering their interest. There are different methods the trustee can take to realise the bankrupt’s beneficial interest in the property thanks to the flexibility and commerciality the Bankruptcy Act affords to a trustee.
A trustee is able to conduct the administration in a way which not only achieves the best result for creditors, but also minimises the harm to the bankrupt and their non-bankrupt partners/relatives. A trustee has at their disposal a range of options in dealing with estate property that maximises the outcome for the mutual benefit of creditors and debtors.
In other words, it is often the case that the best outcome is to reach a commercial settlement that results in the bankrupt retaining the family home and, at the same time, provide for a maximum dividend rate to creditors. In effect, a win-win scenario plays out which is entirely equitable and in accord with the relevant bankruptcy laws and applicable code of ethics.
Under sections 116(1) and 58(1) of the Bankruptcy Act, the bankrupt’s divisible property, including the beneficial interest in their family home, become assets in their bankrupt estate. The trustee is then required to realise the assets for the best possible value to obtain funds to distribute to their creditors.
However, Section 134(1) of the Bankruptcy Act, allows a trustee to exercise the following discretionary powers:
The classic scenario for optimising the outcome for both the debtor and the creditor is where there is marginal equity in the property, and a forced sale of the property by the trustee would result in all proceeds being diminished by the costs of recovery.
Costs of recovery can include court costs to enter into possession, Family Court intervention, adverse family reaction and the usual array of conveyancing and selling costs. The trustee’s costs are also likely to increase during a difficult court-ordered possession.
The alternative solution would be for the trustee and the non-bankrupt spouse to negotiate a settlement of the trustee’s interest in the property whereby the trustee releases the bankrupt from a sale of the property for an agreed upon price paid either as a lump sum or instalments or as a hybrid lump sum/instalment arrangement. The trustee’s interest would ordinarily be sold to a third party, usually the spouse of the bankrupt.
A settlement on the property is a cost-effective means of realising the trustee’s interest in the property, which could maximise the dividend to creditors whilst allowing the bankrupt and their family to retain the family home.
Settlements may also be possible in scenarios where the equity level is much higher. At first instance, it may appear that with a high level of equity a settlement, would not be possible given the size of the trustee’s interest. However, there are many factors which could affect a trustee’s claim which are discussed below.
The value of the bankrupt’s realisable beneficial interest in a property is calculated by deducting from the current market value of the property, the amounts owed to the mortgagee(s) and other security holders, council and water rates and selling expenses. If the property is owned jointly with a non-bankrupt person, the value of their net interest is, likewise, deducted in arriving at the value of the bankrupt’s interest in the property.
However, various areas of law including common law, equity law and in particular, family law may alter the extent of the trustee’s claim to the bankrupt’s beneficial interest in the property.
The variables which will affect a trustee’s interest in the property can include:
Each of the above factors will influence the size of the trustee’s claim to an interest in the property. Below are examples of common situations when dealing with proportions of home ownership and going through bankruptcy.
A typical example is where the bankrupt and their non-bankrupt spouse own a property as joint tenants, are both parties to the home loan secured by a mortgage and earn a similar level of income.
If the gross net equity in the property is $200,000, the trustee will have a claim for $100,000. Where it is appropriate to do so, the trustee may be able to allow the settlement amount to be paid over a period of time in regular instalments.
Given the appropriate circumstances, this may be the best outcome for all concerned including creditors, particularly if any attempt by the trustee to recover the property by force through a court of law could be met with resistance by the non-bankrupt spouse. Escalating costs of a dispute could erode the funds available for a dividend to creditors.
A more complex example may involve a property held in unequal proportions as tenants in common between bankrupt and non-bankrupt spouse.
The intention of the non-bankrupt was to purchase the property for their own benefit, but they needed to purchase the property in joint names to meet the lender’s eligibility criteria for the home loan on the house.
Therefore, the intention of the parties at the time of the purchase in regarding the beneficial ownership of the property, will reduce the size of claim by a trustee. The intention of the parties has been well established in case law: Weston v McAuley [2017] FCCA 1.
Conversely, insolvent debtors and their advisors ought to carefully consider the trustee’s potential claim in scenarios where the insolvent debtor has a smaller proportion of ownership or is not registered on title of a matrimonial home. A 1% ownership of a property as an owner in a tenant in common could potentially expose the insolvent debtor and the non-bankrupt owner to a claim of 50% or more by a trustee.
Also, a trustee may have a claim to an interest in a matrimonial home, the title of which is registered in the sole name of the non-bankrupt spouse.
In other words, the trustee’s claim can be higher or lower than the nominal value of ownership registered on title in scenarios where the insolvent debtor has an equitable interest in the property that does not correspond to the ownership proportion.
The doctrines of resultant trusts, presumption of advancement, constructive trusts and survivorship may apply. Advisers and solicitors should familiarise themselves with these concepts to better assess the trustee’s claim and the overall consequences of bankruptcy.
The following scenarios could lead to a trustee making a larger claim to a beneficial interest in the property than the interest of the bankrupt recorded on the title of the property:
Where there is no net equity in the family home at the date of bankruptcy, the bankrupt and their family can continue to occupy their home as long as they maintain their payments of the mortgage, rates and insurance plus maintain the property. Then, when the bankrupt is discharged from bankruptcy which is normally after a 3-year period, they can re-acquire the net equity in the property based on the market value of the property at that time and the amount owing to the mortgagee(s)
Alternatively, where there is a small net equity in the property, but it is not commercial for the property to be sold, the trustee may enter into an agreement whereby the bankrupt or the purchaser (usually the non-bankrupt spouse) agrees to pay an amount equal to the value of the net equity in the property in either a lump sum or by instalments and the trustee agrees that upon receipt of the agreed amount, the trustee will make no further claim to the bankrupt’s interest in the property.
The means by which a trustee can realise the bankrupt’s beneficial interest in a property without the sale of the property is with a formal document or contract known as a Deed of Settlement or Deed of Release normally executed by the trustee and the non-bankrupt co-owner(s) of property.
The deed will ensure that the trustees have no legal right to pursue their interests in the property pursuant to Section 116(1) and 58(1) of the Bankruptcy Act.
The deed will also ensure the trustees have no legal right to pursue their interests in the property after the discharge date pursuant to Sections 127 and 129 of the Bankruptcy Act.
As a professional advisor or solicitor, you will often be confronted with a difficult position of providing advice to insolvent clients facing financial hardship and risk losing their family home. Having a knowledge of these factors which influence a trustee’s claim to a beneficial interest in the property, will enable you to provide your clients with an accurate prognosis on the likely consequences of bankruptcy and determine the most optimal alternative available to the insolvent debtor.
Creditors and their advisors can also benefit from a knowledge of the alternatives available by a trustee and the various commercial settlements. Such knowledge will better enable a creditor and their advisor to consider the most optimal strategy in recovering their debt and the cost-benefit analysis of undertaking a court-appointed bankruptcy.
The takeaway from this article is that no matter how difficult the home equity position may appear, there are many different variables at play which could result in the bankrupt and their family retaining possession of their family home.
Furthermore, there is scope for a creditor to derive a dividend from an estate even when the equity in a property is negative, marginal or claimed by other parties.
THE FINAL WORD – We all make mistakes and get caught out from time to time. This is life. We have to learn from all we have done. Imagine, if you had an opportunity to right a mistake you would. A debt solution is no difference.
You will have some consequences due to the solution and that is the lesson being applied. Many powerful people have been bankrupt before and have gone on to be very successful. The best ones that come to mind are Sir Richard Branson (owner of the Virgin brand) Donald Trump (US President) Mike Tyson (Boxer) they have all gone on to become successful after becoming bankrupt.
Debt solutions is not a death sentence, but living with debt is. The longer you leave the debt situation, the stress and anxiety increases and could affect mental health.
Do something today and speak with an expert. At Armada we are proud at what we do. We are a family business and built on family values. We will give you the honest solution. We do this, because we know what you are going through and we know how good your life will be after the debt solution is in place.
Armada offer a FREE ASSESSMENT to every client. This is done with NO OBLIGATION. If you want to get a FREE assessment then just click here.
It has been stated in many publications that the Australian Tax Office (ATO) is currently owed approximately $20 billion – This is not a typo, that is “billion” with a “B”.
If you have a ATO (Australian Tax Office) debt less than $100k then you may have been advised or you may think that the ATO will not chase you. This unfortunately, does happen and could have massive repercussions to you in the future.
We are either currently in or just getting out of an unprecedented time in COVID and things are changing….fast. The Australian Government have been providing stimulus to the public to try to keep the economy going and keep food on the table.
You would think this has left a massive hole in the government’s budget. in addition, it wouldn’t be hard to think that the government may need to get this money back in some way.
The government must be thinking on ways to get this money back as quick as possible. It may not be a surprise that the quickest way could be via the reported $20 BILLION owed in possible ATO debt (please note that this may be an approx amount and not the actual amount).
During the Global Financial Crisis (GFC) the ATO seemed to be quite easy-going on small outstanding tax debts and encouraged taxpayers and small businesses to enter payment plans to pay off their outstanding tax debt. This is the same for the period we are experiencing via COVID.
The easy-going approach appears to have been taken advantage of by numerous taxpayers and small businesses. Currently, there is legislation in place to protect people who owe tax debt during COVID. This will have a time limit (currently 31st Dec 2020) and It could be expected that the ATO will start a plan to recover outstanding TAX debts when these limits end (Jan 2021). It may prolong the situation but may not necessarily change it. You will still owe the debt and need help and in a way, this could be a good thing. It gives you the time to get the advice you need and be prepared.
Engage with us early so we can help you deal with your debt while it’s still manageable. We have a number of tools and services available to support you to address your bill while it’s still manageable
We’re committed to listening to your situation and helping you get back on track.
If you don’t pay the amounts you owe the ATO on time:
Make sure you lodge your activity statements and tax returns on time even if you can’t pay by the due date. You’ll avoid a penalty for failing to lodge on time and we’ll know you’re aware of those obligations.
Stronger action includes:
In some cases the ATO may take legal action to recover outstanding tax and super debts. The action we take depends on whether an individual (or sole trader), partnership, trust, superannuation fund or company owes the debt and may include:
Winding up is usually used as a last resort by the ATO, with it generally attempting to recover unpaid tax via payment plans, director penalty notices (which makes the director personally responsible for the debt) or garnishee notices first.
However, this seems that it may not be working. The ATO can be a very hard creditor.
In a recent speech, the Commissioner of Taxation, Chris Jordan stated “We are dealing with people who are not doing the right thing or paying the right amount. We will be taking legal action earlier when warranted. This means initiating winding up action where there is evidence of insolvency.”
We have definitely seen increased debt recovery action by the ATO in the last few months. Mostly outstanding debt notices and phone calls. But where these notices and phone calls result in no payment or communication by the taxpayer or small business, the ATO have advised they will proceed to the next step and initiate legal proceedings, which can include winding up.
DO YOU HAVE A TAX DEBT?
Please talk to Armada Advisory if you have any outstanding business tax or have been issued a director penalty notice, before the ATO takes action. Acting before the ATO do will provide you with more options for a solution. Act today, not tomorrow. Just be committed to change and Armada can do the rest.
If this is all just to much then speak to an expert. Armada Advisory have an expert team to listen to your situation and circumstance and work with you to find out what solutions you are eligible for.
Armada conduct a free financial assessment for all people who make contact. Debt solutions are not a one size that fits all, this is why it is important to speak with an expert to understand the potential solutions you could be working towards.
Armada Advisory agents have all been in debt and they understand the struggles you are going through. We’re not a sales engine, we’re here for you. Based on the information give to the Armada agent, you will be presented with suitable solutions.
It is YOUR choice which way to go. Armada’s aim is to take the stress and pressure away with debt consolidation. Armada just need you to be committed to the process, committed to change, they will do the rest.
Click the link to book in with Armada Advisory and get your free assessment and speak with an expert.
Owing money or falling behind on repayments can be stressful. The good news is there are steps you can take to relieve the financial pressure.
The first step is to get a clear picture of what you owe.
Make a list of all your debts, showing:
Include credit cards, loan repayments, unpaid bills, fines and any other money you owe.
Then add up all the debts to see how much you owe in total. It may be confronting, but remind yourself that you’re taking charge of your money. And that’s a good thing.
The next step is to work out how much you can afford to pay towards your debts.
List all the money you have coming in each month (income), such as salary or benefits. Then list all the money going out (debts and expenses), for things like food, rent or mortgage, credit cards, electricity, phone and transport.
Tally these up, then compare money in and money out. IF the money left over is in negative or minus then you will be struggling to pay your bills as and when they land. This means you may be insolvent.
If the money left over is positive that is a good start. However, if you are close to zero (0) then you still may be struggling to pay bills day to day.
The easiest way to do this is to do a budget. Armada have a self assessment sheet for you to complete. Click the link to complete the SELF ASSESSMENT SHEET
If your income has dropped because of the coronavirus, check if you’re eligible for extra Government financial assistance.
If you have more money going out than coming in — it’s time to make some choices. Think about what are:
Identify some expenses that you can cut or reduce. Be realistic — don’t make it impossible to stick to. Think for ways to reduce your spending.
Work out which debts are your priority debts and try to pay them first if you can. Priority debts include:
If you can’t keep on top of these you can request financial hardship. You could also request financial hardship for lower priority debts like:
Just remember, that financial hardship does have a timeline with it and it will never reduce the total amount of the money owed to your creditors. This is why in some cases completing a formal solution would be a better way to manage a single affordable payment on a regular basis. Some formal solutions can freeze interest and penalty rates so the only money you pay back is the money owed. In some cases dependant on what you can afford some debts can be reduced in a formal solution. Click here to learn more about formal solutions.
Use any surplus you have each week to build an emergency fund. This will provide a financial safety net to cover any unexpected expenses or future changes to your income. The best way to set up another bank account and create a scheduled transfer to direct some of the surplus funds into this account.
Holiday or Christmas savings – As above, the best way to get the funds to pay for a holiday or to get ready for christmas is to prepare for it. Having an additional account for a holiday or christmas and directing some funds when you get paid is the best and effective way to prepare. Every little helps and when it comes to the crunch these types of tactics are essential for your personal well-being. How many times have we all got close to Christmas or the Holiday and think I have no money? The next option is to go for a small high interest loan, the debt cycle begins.
Be prepared.
If this is all just to much then speak to an expert. Armada Advisory have an expert team to listen to your situation and circumstance and work with you to find out what solutions you are eligible for. Armada conduct a free financial assessment for all people who make contact. Debt solutions are not a one size that fits all, this is why it is important to speak with an expert to understand the potential solutions you could be working towards.
Armada Advisory agents have all been in debt and they understand the struggles you are going through. We are not a sales engine, we’re here for you. Based on the information give to the Armada agent, you will be presented with suitable solutions. It is your choice which way to go. Armada’s aim is to take the stress and pressure away. Armada just need you to be committed to the process, committed to change, they will do the rest.
Click the link to book in with Armada Advisory and get your free assessment and speak with an expert.
Some information provided by Money Smart.
In the current climate, with jobs being reduced and the unemployment rate around 10%. Are we just to proud to admit that we have a debt issue?
The following was an article provided by savings.com.au
The bank conducted two surveys of more than 1,070 Australians aged 18+, and found these debt-laden Aussies have racked up a combined $18.1 billion in debt over last Christmas period alone, at an average of $934 per person.
The research also delved into our attitudes towards debt.
The results show 25% of the population are ignoring their debt altogether because they don’t want to talk about it – a number that increases to 51% for millennials. Are we just use to debt or are we use to the plastic fantastic (Credit Cards, debit cards…etc). Again in the curretn climate, cash is not being used anywhere as frequently than before so do we know or are we aware of what we are spending on a week to week basis?
Aussies are feeling “anxious” (47%) and “embarrassed” (38%) about their debts, with another two-thirds (61%) admitting they’d rather talk about ‘anything else’ than their debts, including relationship troubles (58%).
ING spokesperson David Breen said the stigma attached to loans and debt means Australia as a nation is too embarrassed to discuss finances.
“The research revealed that it can lead to Australians turning to gambling, rather than looking at options like debt consolidation to help manage repayment of their debts,” Mr Breen said.
“We need to get people talking about their debt and workshopping management options, whether that’s opening up to friends, family or a financial advisor.”
THE FINAL WORD – We all make mistakes and get caught out from time to time. This is life. We have to learn from all we have done. Imagine, if you had an opportunity to right a mistake you would. A debt solution is no difference. You will have some consequences due to the solution and that is the lesson being applied. Many powerful people have been bankrupt before and have gone on to be very successful. The best ones that come to mind are Sir Richard Branson (owner of the Virgin brand) Donald Trump (US President) Mike Tyson (Boxer) they have all gone on to become successful after becoming bankrupt.
Debt solutions is not a death sentence, but living with debt is. The longer you leave the debt situation, the stress and anxiety increases and could affect mental health. Do something today and speak with an expert. At Armada we are proud at what we do. We are a family business and built on family values. We will give you the honest solution, even if it isn’t what you want to hear. We do that because we know what you are going through and we know how good your life will be after the debt solution is in place. Armada offer a FREE ASSESSMENT to every client. This is done with NO OBLIGATION. If you want to get a FREE assessment then just click here.
Australia’s unemployment rate rose to 7.4 per cent in June, despite the addition of more than 210,000 jobs.
The number of unemployed people rose by 69,300 to 992,300 in June, according to the Australian Bureau of Statistics.
It means the country’s unemployment rate has risen from 7.1 per cent in May to 7.4 per cent – the highest in Australia since November 1998.
Armada Advisory’s CEO – Carlo Napolitano gives his view on the current situation in both COVID and unemployment.
Not only is COVID making all our lives a living misery, if you are one of the many who is not able to go to work due to company lockdown or the company closing for good what can you do?
We all have debts, everyone has borrowed money to buy a house, buy a car or you may have done some renovations to the house or home office and the only exercise being done is the flexing of the plastic fantastic (Credit Card). We’re all in debt, some are in good debt (affordable debts) and some are in bad debt (non-affordable debts). Doing nothing is not an option.
Now just look at your own situation. Your job may have been taken away and the only income stream is one provided by the government in jobseeker / new start. Now is the time to look at your situation and take stock of what you can do.If you’re struggling with paying debts as and when they fall then you need help. This is serious!! It needs a serious solution to get things back on track.
What are your options? The first one is to take the first step and speak to someone. Speak to an expert. The sooner you do this the more options you have. There are many solutions to your debt pain, but many have strict criteria and leaving it to late means that you may not qualify for all solutions. Act now!!
The next step is to leave your pride outside. We are all proud people and sometimes you need to act, move forward and dont have doubts. You will be amazed how easy a debt solution can be for you. Check your expectations, what you possibly want is not what you may qualify for. Make sure you have an open mind and understand that the aim is to find a solution for your current situation.
Plan for the future – If you think that paying the minimum payment on your credit card is progress then just keep this in mind. Paying back a debt of $10,000 just on minimum payments (13% interest) will take you around 20 years to pay off and you will pay $10,000 on top of the money you borrowed just in interest. THIS IS NOT PROGRESS.
THE FINAL WORD – We all make mistakes and get caught out from time to time. This is life. We have to learn from all we have done. Imagine, if you had an opportunity to right a mistake you would. A debt solution is no difference. You will have some consequences due to the solution and that is the lesson being applied. Many powerful people have been bankrupt before and have gone on to be very successful. The best ones that come to mind are Sir Richard Branson (owner of the Virgin brand) Donald Trump (US President) Mike Tyson (Boxer) they have all gone on to become successful after becoming bankrupt.
Debt solutions is not a death sentence, but living with debt is. The longer you leave the debt situation, the stress and anxiety increases and could affect mental health. Do something today and speak with an expert. At Armada we are proud at what we do. We are a family business and built on family values. We will give you the honest solution, even if it isn’t what you want to hear. We do that because we know what you are going through and we know how good your life will be after the debt solution is in place. Armada offer a FREE ASSESSMENT to every client. This is done with NO OBLIGATION. If you want to get a FREE assessment then just click here.
This week has brought lots of discussion in our team about the position of lending and plausible exit strategies when it comes to dealing with debt.
The discussion has brought lots of different scenarios, circumstances and situations. The team thought it was great to share with everyone on what was discussed around debts.
The first thing that was mentioned on how different each case in personal or business debts is. We often say when talking to clients “Debt solutions is not a one size that fits all”. It is completely true. Everyone has a different situation and a different set of circumstances. So, it is hard to tell anyone what to do. The best option is to contact an expert and get them to do an assessment to understand the custom solution for them (Armada do this completely FREE #justsaying).
The best way is to look at the solutions and explain the good and the bad of each. Please remember, this information is not a way not to discuss your case with an expert. This will only outline the solutions and it is recommended you take the time to call an expert.
Lending options – Short term loans (payday loans), Personal Loans, Credit Card and borrowing from family
This is the first thing people think of when in debt. How can I borrow more to satisfy my debts. The key here is to think of your own income and expenditure (outgoings). If you can’t afford to repay your existing debts as and when they land, then getting a larger loan to service the smaller loans is not a smart thing to do. The interest and penalties dont get smaller, they get bigger and you get a longer loan period.
Short Term Loans or Payday loans: These are just a ticking time bomb. Most charge an interest rate that is so high it will give anyone a nose bleed. You are looking anywhere from 20% to 50% interest based on the duration of the loan. This means if you get a loan for $5000 you could owe $2500 on top of the loan amount. In the experience of the team at Armada, most of our clients are in debt because of these types of loans. They spiral out of control very quickly and they cannot be pulled back. In addition to this if you have a lender who is classed as payday lender, no big bank will look at you for most of their lending products. This means if you are thinking of trying to get a finance or a debt consolidation loan and you have a prior payday loan, you may be declined.
Royal Commission – So everyone knows that there was a Royal Commission into the processes of major lending institutions. This has had NEGATIVE result on the ability of lending institutions to just accept new lending applications. Then add the Coronavirus to it and lending is really tough. This was the general feeling in our team meeting when many of the Armada team have just been denied car finance.
If you have solid income, which is tough during the current COVID19 crisis, and you have a strong positive uncommitted income after all your essential outgoings are paid then you do have a 12 month option. This will apply to any credit card debts you may have. You can transfer all your credit card debts into a 0% transfer with other credit card lenders. Most of the big lenders do this. The trick is to get everything paid off by month 11. This is not a good option if you have 1 credit card and all you other debts are suppliers, finance or personal loans.
Debt Agreement or Part 9’s
At Armada we feel that Debt Agreements get a tough time, when they are a very good product for dealing with personal debt. These are great for people who have a positive uncommitted income (income minus essential outgoings) and they are COMMITTED to getting their debt under control.
How do they work? They are quite simple and very effective. You do an assessment and an expert (team member) will go through your debts, income and outgoings and see what your uncommitted income is. In the assessment, the team member will try to complete a balancing act with what you owe to your creditors and what you can afford. The team member will present to you a figure that you can afford over a period of team (usually 3 – 5 years, depending on having a home loan or not). Debt Agreements are much like a debt consolidation loan WITHOUT the interest and penalties. For more info click here if you want to get a FREE assessment then click here.
In a debt agreement you are only on the National Personal Insolvency Index (NPII) for a period of 5 years. Then you are removed from the NPII. In short, you will start to rebuild your score from this point. The best option is to contact an expert and get them to do an assessment to understand the custom solution for them. For more info click here if you want to get a FREE assessment then click here.
Bankruptcy
Again, Bankruptcy gets a really hard deal from a lot of people. They see it as a black mark against you and people avoid it like the plague. In reality, Bankruptcy is a very good product when you have no other options available. If you have debts and you have no income to pay them, then bankruptcy is a very good option. Doing nothing is NOT an option. The best way to explain Bankruptcy is like pressing RESET on the your debts and starting from zero. Imagine the build up of all the stress that debt brings, the worry, scared to answer the phone and it just stops. That is bankruptcy in a nutshell. Again, it is not all positives as it is any formal debt solution. You do have consequences.
In bankruptcy you are on the National Personal Insolvency Index (NPII) permanently. You will start to rebuild your score from this point, but it will be at a much slower rate than a debt agreement. The best option is to contact an expert and get them to do an assessment to understand the custom solution for them. For more info click here if you want to get a FREE assessment then click here.
Credit Score – To be totally honest, if you are in arrears or falling behind in payments, your credit score will be in a poor position. Credit Scores are like a wall, they fall down, but you can rebuild them. The biggest issue facing anyone who is reading this, is to just focus on stopping the debts getting worse. If you dont act quick, then you reduce the amount of solutions you can qualify for. Will it stop you for gaining finance? It all depends on who you are applying with. All lenders have their own set of application standards, so like debt it isn’t a one size that fits all.
THE FINAL WORD – We all make mistakes and get caught out from time to time. This is life and we have to learn from all we have done. Imagine if you had an opportunity to right a mistake you would. Debt solutions is no difference. You will have consequences and that is the lesson being applied. Many powerful people have been bankrupt before and have gone on to be very successful. The best one that comes to mind is Sir Richard Branson (owner of the Virgin brand). Debt solutions is not a death sentence, but living with debt is. The longer you leave the debt situation, the stress and anxiety increases and could affect mental health. Do something today and speak with an expert. At Armada we are proud at what we do. We are a family business and built on family values. We will give you the honest solution, even if it isn’t what you want to hear. We do that because we know what you are going through and we know how good your life will be after the debt solution is in place. Armada offer a FREE ASSESSMENT to every client. This is done with NO OBLIGATION. If you want to get a FREE assessment then just click here.
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