What to do if you’ve been refused a debt consolidation loan

Have you tried to consolidate your debts but you have been refused a debt consolidation loan due to your bad credit history?

If your debts have become too difficult to manage and you feel that you have lost control then you may wish to consider a formal debt solution. Let us explain more about your options to become debt free with a formal debt solution.

Learn more about a formal debt solution

Essentially if you are insolvent , which means you can no longer pay your debts on time, then you should learn more about a formal agreement which you can enter into with your creditors. Personal insolvency is a tightly regulated industry in Australia with many laws which are designed to protect both you and your creditors.

If you are insolvent you have essentially have three options. The first 2 options are a formal debt solution:

1. Debt Agreement

2. Personal insolvency Agreement

The third option is personal bankruptcy. People usually consider personal bankruptcy if a Debt Agreement or a Personal Insolvency Agreement is not possible (usually after we have undertaken an assessment).

3. Bankruptcy

How do these help?

Each of these options involves entering into a formal arrangement with your creditors which will be controlled and monitored by a registered insolvency practitioner.The benefits you get from entering into one of these agreements are:

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  1. Consolidated repayment into one monthly figure.
  2. Agreement with creditors that remaining amount of debt at the end of the agreement will be written off
  3. Creditors must halt all debt recovery proceedings

Consolidated repayment

Just like in a debt consolidation loan, all of your repayments get rolled into one easy to manage regular payment (which are usually set up to coincide with your pay day).

Formal agreement with your creditors

Once you creditors agree to enter into an agreement, they are legally bound to write off any balance that remains outstanding at the end of the agreement.

No more harassing calls or letters

Once the agreement has been legally set up and agreed to by the majority of your creditors, all creditors (even if some didn’t agree) must deal with the insolvency practitioner who was appointed to supervise the agreement. This means that your creditors will no longer be able to call or deal with you direct.

Where to get more information

If you have been refused a debt consolidation loan and you feel that your debts are out of control, then the next step is to contact us direct. We will explain the formal debt solutions available in more detail in a personalized assessment.Call now on 1800 98 10 70 to speak to one of our friendly debt consultants.