1 00:00:00,200 --> 00:00:25,520 Speaker 1: She's on the Money. She's on the Money. 2 00:00:26,560 --> 00:00:29,640 Speaker 2: Hello, and welcome to She's on the Money, the podcast 3 00:00:29,640 --> 00:00:34,080 Speaker 2: for millennials who want financial freedom. Dead agreements? What are they? 4 00:00:34,320 --> 00:00:37,320 Speaker 2: What are their implications and are they a good idea? 5 00:00:37,920 --> 00:00:40,519 Speaker 2: My name is Georgia King, and joining me to get 6 00:00:40,560 --> 00:00:43,640 Speaker 2: to the bottom of it all is financial advisor Victoria 7 00:00:43,800 --> 00:00:45,199 Speaker 2: Divine V. 8 00:00:45,560 --> 00:00:46,519 Speaker 3: Good day, Melady. 9 00:00:46,880 --> 00:00:47,400 Speaker 2: Hello. 10 00:00:47,840 --> 00:00:50,519 Speaker 3: That felt really strange to say. I just took one 11 00:00:50,560 --> 00:00:52,360 Speaker 3: of your terms and decided to. 12 00:00:52,280 --> 00:00:55,360 Speaker 2: Try it, do you say, milady, Yeah, thank you for 13 00:00:55,760 --> 00:00:59,400 Speaker 2: doing a little nod to ge'z to the g vernacular. 14 00:00:59,520 --> 00:01:00,240 Speaker 2: I enjoy it. 15 00:01:00,440 --> 00:01:03,600 Speaker 3: Won't happen again. Really uncomfortable coming out of my mill, 16 00:01:03,920 --> 00:01:05,880 Speaker 3: but thank you. Let's get on with the episode. 17 00:01:05,920 --> 00:01:09,759 Speaker 2: Jeorge, I loved. I loved. What is a dead agreement? 18 00:01:10,240 --> 00:01:10,600 Speaker 2: All right? 19 00:01:10,760 --> 00:01:14,000 Speaker 3: So a dead agreement is exactly what it sounds like. 20 00:01:14,160 --> 00:01:16,920 Speaker 3: It is a legally binding agreement that can actually help 21 00:01:16,959 --> 00:01:20,520 Speaker 3: you settle your debts without having to go bankrupt, which 22 00:01:21,040 --> 00:01:24,080 Speaker 3: is a good outcome if you have to consider bankruptcy, 23 00:01:24,280 --> 00:01:27,199 Speaker 3: because as much as we've done an episode on bankruptcy before, 24 00:01:27,280 --> 00:01:30,640 Speaker 3: it's not something that you do lightly like it would 25 00:01:30,680 --> 00:01:32,920 Speaker 3: be a last option to get out of a sticky 26 00:01:32,959 --> 00:01:35,240 Speaker 3: situation that you know you can't get out of in 27 00:01:35,319 --> 00:01:39,000 Speaker 3: any other way. So it's really important to remember that 28 00:01:39,400 --> 00:01:42,600 Speaker 3: there's not all that much that is sexy about bankruptcy. 29 00:01:42,680 --> 00:01:45,720 Speaker 3: And I think that, you know, as the She's on 30 00:01:45,800 --> 00:01:48,360 Speaker 3: the money person, I get a lot of DMS about it, 31 00:01:48,400 --> 00:01:51,960 Speaker 3: and I feel like there's still this misconception that it's 32 00:01:52,040 --> 00:01:54,840 Speaker 3: just really easy, like you just go bankrupt ry, like 33 00:01:54,880 --> 00:01:58,080 Speaker 3: I've racked up all this debt, I'll just go bankrupt Like, No, 34 00:01:58,200 --> 00:02:01,160 Speaker 3: that is not the case. Please listen to that episode. 35 00:02:01,400 --> 00:02:06,040 Speaker 3: So a debt agreement is also not a debt consolidation agreement, 36 00:02:06,240 --> 00:02:09,120 Speaker 3: which we've also spoken about on the podcast before, albeit 37 00:02:09,160 --> 00:02:13,760 Speaker 3: it does sound similar. So basically, g with a debt agreement, 38 00:02:14,240 --> 00:02:17,079 Speaker 3: you negotiate to pay a portion of your combined debt 39 00:02:17,280 --> 00:02:20,040 Speaker 3: off over a period of time, and you work with 40 00:02:20,160 --> 00:02:24,079 Speaker 3: a debt agreement administrator who is a legitimate person who 41 00:02:24,080 --> 00:02:27,280 Speaker 3: will liaise between both you and your creditors. You have 42 00:02:27,400 --> 00:02:30,160 Speaker 3: to make sure that everybody's hunky dorian really happy with 43 00:02:30,200 --> 00:02:33,080 Speaker 3: the process and it works. But essentially you do this 44 00:02:33,200 --> 00:02:35,800 Speaker 3: when you can't pay back the full debt, so you 45 00:02:35,880 --> 00:02:37,520 Speaker 3: need to come to an agreement and you go look, 46 00:02:37,560 --> 00:02:39,760 Speaker 3: and there's no way I'm paying that back. What can 47 00:02:39,840 --> 00:02:42,520 Speaker 3: I pay back? What would be reasonable. Let's have a 48 00:02:42,560 --> 00:02:45,080 Speaker 3: new agreement so that I pay you back, I don't 49 00:02:45,120 --> 00:02:47,800 Speaker 3: have to go bankrupt and you actually get your money. 50 00:02:48,000 --> 00:02:51,200 Speaker 3: Because often when somebody does go bankrupt, if they literally 51 00:02:51,280 --> 00:02:54,120 Speaker 3: have nothing, that creditor is not going to win like 52 00:02:54,200 --> 00:02:57,880 Speaker 3: they don't get anything. So creditors are much more likely 53 00:02:58,080 --> 00:03:00,680 Speaker 3: to want to enter into a debt agreement with you, 54 00:03:01,240 --> 00:03:03,160 Speaker 3: even if it means they end up with less money, 55 00:03:03,240 --> 00:03:05,200 Speaker 3: because it's better than ending up with no money. 56 00:03:05,240 --> 00:03:09,160 Speaker 2: G Yeah, so they still get some exactly. Sorry, you 57 00:03:09,240 --> 00:03:11,600 Speaker 2: really threw me there when you said hunky dory. 58 00:03:11,960 --> 00:03:15,760 Speaker 3: I'm just trying to be more relatable. Georgia very hip. 59 00:03:15,880 --> 00:03:19,240 Speaker 2: We loved it. So how do you go about arranging 60 00:03:19,440 --> 00:03:20,120 Speaker 2: a debt agreement? 61 00:03:20,240 --> 00:03:23,080 Speaker 3: B So, the first place I would go is our 62 00:03:23,120 --> 00:03:26,920 Speaker 3: friends at the National Debt Helpline. Again not sponsored, just 63 00:03:27,080 --> 00:03:30,600 Speaker 3: good Eggs doing epic work. So head on over there. 64 00:03:30,840 --> 00:03:32,280 Speaker 3: If you don't want to go there and you want 65 00:03:32,320 --> 00:03:34,200 Speaker 3: to do it yourself, you can go and have a 66 00:03:34,280 --> 00:03:37,920 Speaker 3: chat with a registered debt agreement administrator. I guarantee our 67 00:03:37,920 --> 00:03:40,920 Speaker 3: friends at the National Debt Helpline have a good recommendation though, 68 00:03:41,440 --> 00:03:43,880 Speaker 3: and then they will work with you to submit your 69 00:03:43,880 --> 00:03:48,320 Speaker 3: debt agreement proposal to the AFSA or technically known as 70 00:03:48,320 --> 00:03:51,520 Speaker 3: the Australian Financial Security Authority. You can find a debt 71 00:03:51,560 --> 00:03:54,640 Speaker 3: agreement officer if you want, at the AFSA's website where 72 00:03:54,640 --> 00:03:57,640 Speaker 3: they have a whole list of registered professionals in this space. 73 00:03:57,920 --> 00:04:01,520 Speaker 3: So there's lots of resources flowed if you need help 74 00:04:01,600 --> 00:04:03,080 Speaker 3: to arrange something like this. 75 00:04:03,840 --> 00:04:06,920 Speaker 2: So it sounds like debt agreements are a really good 76 00:04:06,960 --> 00:04:09,480 Speaker 2: option for people who are feeling snowed under by multiple 77 00:04:09,520 --> 00:04:12,880 Speaker 2: debts that they just can't pay back. How do you 78 00:04:12,920 --> 00:04:14,640 Speaker 2: know if it's the right option for you and if 79 00:04:14,680 --> 00:04:17,839 Speaker 2: you have enough debt? Is it just a question or 80 00:04:17,880 --> 00:04:20,760 Speaker 2: a matter of going to the National Debt Helpline and 81 00:04:20,800 --> 00:04:22,600 Speaker 2: sorting it out or what would you recommend? 82 00:04:23,160 --> 00:04:25,880 Speaker 3: Look, I would try to avoid these things. I won't 83 00:04:25,880 --> 00:04:28,200 Speaker 3: say at all costs, But obviously we want to make 84 00:04:28,200 --> 00:04:30,479 Speaker 3: sure that we understand our budget and our cash flow 85 00:04:30,520 --> 00:04:33,120 Speaker 3: and what we're able to pay back. But I've actually 86 00:04:33,160 --> 00:04:36,719 Speaker 3: sat down with people many many times and calculated that 87 00:04:36,760 --> 00:04:39,160 Speaker 3: they can't afford the debt that they've got. And when 88 00:04:39,160 --> 00:04:41,880 Speaker 3: I say it can't afford It's not because they're prioritizing 89 00:04:41,960 --> 00:04:44,720 Speaker 3: luxuries or they are in a situation where they're like, oh, 90 00:04:44,760 --> 00:04:46,240 Speaker 3: I just don't want to do that because I've got 91 00:04:46,240 --> 00:04:49,479 Speaker 3: other priorities. Like, that's not the case. Sometimes I'll sit 92 00:04:49,520 --> 00:04:52,240 Speaker 3: down with someone and I don't do this anymore. I 93 00:04:52,240 --> 00:04:55,280 Speaker 3: do apologize because I just don't have the capacity, which 94 00:04:55,279 --> 00:04:57,719 Speaker 3: is why I work now so closely with the National 95 00:04:57,760 --> 00:04:59,920 Speaker 3: Debt Helpline to make sure that I can get people, 96 00:05:00,080 --> 00:05:02,360 Speaker 3: well we're in these situations the help they need from 97 00:05:02,400 --> 00:05:05,800 Speaker 3: a free financial counselor. But I'd sit down with people 98 00:05:05,839 --> 00:05:07,719 Speaker 3: and be like, what's your cashally like? And they'd be like, okay, 99 00:05:07,720 --> 00:05:10,760 Speaker 3: between us, we earn maybe seven grand. I'd be like, okay, 100 00:05:10,760 --> 00:05:12,760 Speaker 3: what's your debt look like? And they'd be like, oh, well, 101 00:05:12,800 --> 00:05:15,560 Speaker 3: at the moment, we're just putting debt repayments on other 102 00:05:15,640 --> 00:05:18,919 Speaker 3: credit cards because we actually can't. Our debt repayments are 103 00:05:18,960 --> 00:05:21,240 Speaker 3: about six grand a month, and they've got kids, and 104 00:05:21,279 --> 00:05:25,880 Speaker 3: they might be literally unable to meet those requirements. I'm 105 00:05:25,920 --> 00:05:29,200 Speaker 3: not saying that everybody's situation is as dramatic as that, Like, 106 00:05:29,240 --> 00:05:31,520 Speaker 3: you could have a credit card that you genuinely don't 107 00:05:31,520 --> 00:05:34,600 Speaker 3: feel like you can pay off. Entering a debt agreement 108 00:05:34,720 --> 00:05:37,640 Speaker 3: is going to look different for everybody. It's not this 109 00:05:37,720 --> 00:05:40,200 Speaker 3: one size fits all, like go and get this product. 110 00:05:40,320 --> 00:05:43,160 Speaker 3: It's not a product. It is like a structure and 111 00:05:43,200 --> 00:05:46,479 Speaker 3: a service that you would organize between you and the 112 00:05:46,560 --> 00:05:49,200 Speaker 3: person you own money to so that you don't have 113 00:05:49,240 --> 00:05:52,880 Speaker 3: to go bankrupt. But essentially, if you feel like you 114 00:05:53,000 --> 00:05:55,200 Speaker 3: need one, that is the time that you want to 115 00:05:55,200 --> 00:05:57,640 Speaker 3: have a chat with a financial counselor. Which is why 116 00:05:57,680 --> 00:06:00,400 Speaker 3: I'm so pro chatting to the National Debt Helper. I 117 00:06:00,480 --> 00:06:02,960 Speaker 3: promise they're delightful humans and they'll set you up with 118 00:06:03,000 --> 00:06:05,600 Speaker 3: a financial counselor to have a chat with. But if 119 00:06:05,640 --> 00:06:07,640 Speaker 3: you feel like you need one, I would be doing 120 00:06:07,680 --> 00:06:10,240 Speaker 3: a whole heap of research around what that looks like. 121 00:06:10,600 --> 00:06:13,520 Speaker 3: This isn't an option for you if you're like, oh, well, 122 00:06:13,520 --> 00:06:15,880 Speaker 3: I think I might want to consolidate my debts, Oh 123 00:06:15,920 --> 00:06:19,000 Speaker 3: it sounds good to negotiate it down, like, that's not 124 00:06:19,120 --> 00:06:22,640 Speaker 3: the purpose, Like they will look into what you can 125 00:06:22,720 --> 00:06:25,680 Speaker 3: afford and want a reasonable payout. They're not for people 126 00:06:25,720 --> 00:06:27,400 Speaker 3: who just want to try and get out of paying 127 00:06:27,440 --> 00:06:29,800 Speaker 3: debt off. If that makes sense, George, which I mean, 128 00:06:29,839 --> 00:06:31,880 Speaker 3: we all would want to do if we were in it, 129 00:06:31,960 --> 00:06:34,640 Speaker 3: Oh gotcha, But that's not what they exist for. Are 130 00:06:34,720 --> 00:06:37,760 Speaker 3: there then limits on how much you can actually roll 131 00:06:37,800 --> 00:06:41,280 Speaker 3: into these agreements? F look not from what I understand. 132 00:06:41,400 --> 00:06:44,880 Speaker 3: I mean, I have had people who have been refused 133 00:06:45,040 --> 00:06:48,480 Speaker 3: dead agreements in the past. I've had conversations with people 134 00:06:48,480 --> 00:06:50,960 Speaker 3: on my own really sorry, they're just not willing to settle, 135 00:06:51,080 --> 00:06:53,320 Speaker 3: or they just don't want to enter into that, or 136 00:06:53,360 --> 00:06:55,919 Speaker 3: that won't work for your situation who have had to 137 00:06:55,960 --> 00:06:58,880 Speaker 3: go down the route of bankruptcy. But if you can't 138 00:06:58,880 --> 00:07:01,600 Speaker 3: get a dead agreement, I'm not saying that's okay, because 139 00:07:01,600 --> 00:07:04,000 Speaker 3: I mean, it would be very stressful. But there are 140 00:07:04,080 --> 00:07:06,359 Speaker 3: other options and that's why. And I mean, this just 141 00:07:06,400 --> 00:07:08,640 Speaker 3: feels like an entire giant ad for our friends at 142 00:07:08,640 --> 00:07:11,560 Speaker 3: the National Debt Help Line. You're welcome. I don't get 143 00:07:11,600 --> 00:07:14,320 Speaker 3: paid by them, by the way, I never have been, 144 00:07:14,920 --> 00:07:17,520 Speaker 3: But I would have a chat to a financial counselor 145 00:07:17,560 --> 00:07:20,360 Speaker 3: if that's the situation you were in, because I guarantee 146 00:07:20,400 --> 00:07:23,200 Speaker 3: you they will help and there's no shame in reaching 147 00:07:23,240 --> 00:07:25,440 Speaker 3: out to them. It doesn't matter if money is dressing 148 00:07:25,480 --> 00:07:28,760 Speaker 3: you and you just feel overwhelmed and you can't afford advice. 149 00:07:29,160 --> 00:07:31,960 Speaker 3: I would be talking to them, like absolutely hands down. 150 00:07:32,000 --> 00:07:34,240 Speaker 3: If I was in that situation, I would feel comfortable 151 00:07:34,280 --> 00:07:36,160 Speaker 3: to call them. So, Gee, I don't think that there 152 00:07:36,160 --> 00:07:39,280 Speaker 3: are limits on it, but people might not get one. 153 00:07:39,520 --> 00:07:41,760 Speaker 3: So I've seen it before where it's just too much 154 00:07:41,760 --> 00:07:44,000 Speaker 3: and it was just too complicated, or there were too 155 00:07:44,080 --> 00:07:47,560 Speaker 3: many creditors involved, Like I worked with one person that 156 00:07:47,720 --> 00:07:50,200 Speaker 3: had more than ten different credit cards that were all 157 00:07:50,240 --> 00:07:54,400 Speaker 3: maxed oush and that's a really scary situation to be in. 158 00:07:54,640 --> 00:07:57,480 Speaker 3: Like they were terrified, and I'm so grateful that I 159 00:07:57,520 --> 00:07:59,560 Speaker 3: got to hold their hand and get them through that 160 00:07:59,640 --> 00:08:02,559 Speaker 3: pro But yes, there is the risk that maybe someone 161 00:08:02,600 --> 00:08:04,560 Speaker 3: doesn't want to go into an agreement because it is 162 00:08:04,600 --> 00:08:07,320 Speaker 3: too high, But there's not an official limit per se. 163 00:08:07,400 --> 00:08:09,320 Speaker 3: It very much comes down to the debt that you 164 00:08:09,400 --> 00:08:12,520 Speaker 3: have and whether they are willing to enter into an 165 00:08:12,520 --> 00:08:13,560 Speaker 3: agreement with you or not. 166 00:08:14,160 --> 00:08:16,720 Speaker 2: And do they cover like all kinds of debts are 167 00:08:16,760 --> 00:08:18,280 Speaker 2: only certain kinds? 168 00:08:18,800 --> 00:08:23,320 Speaker 3: Oh good question. Gee, they actually only cover some types 169 00:08:23,360 --> 00:08:26,840 Speaker 3: of debts. So you can't go get a debt agreement 170 00:08:26,920 --> 00:08:30,080 Speaker 3: for your hex because that would not make sense. You 171 00:08:30,160 --> 00:08:32,560 Speaker 3: also can't roll your court fines so if you're going 172 00:08:32,559 --> 00:08:34,960 Speaker 3: to court for being a little bit naughty, they're not 173 00:08:35,000 --> 00:08:37,600 Speaker 3: going to let you roll those. But you can get 174 00:08:37,600 --> 00:08:40,800 Speaker 3: a debt agreement for most unsecured debts, so like credit 175 00:08:40,800 --> 00:08:43,240 Speaker 3: cards or personal loans, or bills that you haven't been 176 00:08:43,280 --> 00:08:45,400 Speaker 3: able to pay or rent that you haven't been able 177 00:08:45,440 --> 00:08:47,760 Speaker 3: to meet, or an overdrawn bank account if that's the 178 00:08:47,800 --> 00:08:50,720 Speaker 3: situation you've found yourself in. But yes, there are some 179 00:08:50,880 --> 00:08:54,000 Speaker 3: things that aren't able to be covered. You know, I've 180 00:08:54,040 --> 00:08:55,560 Speaker 3: never been in the situation, but they're probably not going 181 00:08:55,640 --> 00:08:57,120 Speaker 3: to pay you drug dealer or off you know jay. 182 00:08:57,840 --> 00:09:00,400 Speaker 2: Ah, fair call, fair call, And I guess like they 183 00:09:00,480 --> 00:09:04,800 Speaker 2: wouldn't cover like your house, your home on your mortgage 184 00:09:04,880 --> 00:09:07,000 Speaker 2: because they would just seize it, right like you just 185 00:09:07,040 --> 00:09:08,880 Speaker 2: sell it. You wouldn't be able to keep that. 186 00:09:09,440 --> 00:09:13,280 Speaker 3: Yeah, so with a secured asset. So a secured asset 187 00:09:13,320 --> 00:09:16,520 Speaker 3: means there's something there and that's the risk that you carry. 188 00:09:16,679 --> 00:09:19,120 Speaker 3: It's why a personal loan sits at an average of 189 00:09:19,120 --> 00:09:21,800 Speaker 3: a fourteen percent interest rate and a home loan at 190 00:09:21,800 --> 00:09:24,720 Speaker 3: the moment's like two percent. It's because of the difference 191 00:09:24,760 --> 00:09:27,360 Speaker 3: in risk. So with a home loan, if you can't 192 00:09:27,400 --> 00:09:30,880 Speaker 3: meet those repayments. It would be in your contract what happens, 193 00:09:31,120 --> 00:09:33,520 Speaker 3: So they might go, okay, if you miss repayments for 194 00:09:33,600 --> 00:09:36,320 Speaker 3: this period of time, will actually put your house on 195 00:09:36,400 --> 00:09:39,679 Speaker 3: the market and recover our costs. There might be some 196 00:09:39,800 --> 00:09:42,880 Speaker 3: outstanding amount, so say the property is valued it less 197 00:09:42,960 --> 00:09:45,440 Speaker 3: or it is sold for less than what the mortgage 198 00:09:45,480 --> 00:09:47,920 Speaker 3: you owe is, you might still end up in a 199 00:09:47,960 --> 00:09:50,559 Speaker 3: situation where you're carrying a bit of debt that doesn't 200 00:09:50,600 --> 00:09:54,320 Speaker 3: just disappear because they sell your house. So there might 201 00:09:54,400 --> 00:09:57,760 Speaker 3: be some reasons why you would still carry debt. But yes, 202 00:09:57,840 --> 00:10:00,480 Speaker 3: if it's secured, usually they'll get rid of that to 203 00:10:00,520 --> 00:10:02,680 Speaker 3: recover as much of the cost as possible and go 204 00:10:02,800 --> 00:10:03,280 Speaker 3: from there. 205 00:10:04,679 --> 00:10:07,959 Speaker 2: And what are the consequences to this speed, because you've 206 00:10:08,000 --> 00:10:10,400 Speaker 2: kind of said that it's not something you would just 207 00:10:10,440 --> 00:10:12,960 Speaker 2: go into lightly to kind of not get rid of 208 00:10:12,960 --> 00:10:15,520 Speaker 2: a few credit card debts, Like, what are the consequences 209 00:10:15,559 --> 00:10:16,280 Speaker 2: we're looking at here? 210 00:10:16,440 --> 00:10:20,200 Speaker 3: Yeah, so obviously the consequences are not nearly as significant 211 00:10:20,240 --> 00:10:23,480 Speaker 3: as the consequences of going bankrupt, which we've discussed on 212 00:10:23,559 --> 00:10:27,120 Speaker 3: another episode. But there are a few consequences that we 213 00:10:27,200 --> 00:10:31,160 Speaker 3: absolutely should discuss. If you're in business, it is essential 214 00:10:31,400 --> 00:10:33,920 Speaker 3: that you inform the people you do your business with 215 00:10:34,000 --> 00:10:36,400 Speaker 3: that you're in a debt arrangement, Like legally you need 216 00:10:36,440 --> 00:10:38,760 Speaker 3: to tell them, and you might go, Okay, I'm friends 217 00:10:38,760 --> 00:10:41,400 Speaker 3: with all my clients, I don't care, but that could 218 00:10:41,400 --> 00:10:43,920 Speaker 3: actually impact your reputation or whether they want to work 219 00:10:43,920 --> 00:10:46,680 Speaker 3: with you. And like, hypothetically, what if I said that 220 00:10:46,760 --> 00:10:49,839 Speaker 3: to my clients, George, Like, I'm a financial advisor. I'm 221 00:10:49,840 --> 00:10:52,719 Speaker 3: not in debt, thankfully, but like what if I was? 222 00:10:53,000 --> 00:10:55,200 Speaker 3: Would that make them see me as maybe not a 223 00:10:55,200 --> 00:10:58,199 Speaker 3: good financial advisor? Cause I can't even manage that myself. 224 00:10:58,240 --> 00:10:59,920 Speaker 3: I think that there's a lot to work through them. 225 00:11:00,400 --> 00:11:03,240 Speaker 3: In addition to just having to tell people, like informing 226 00:11:03,280 --> 00:11:06,000 Speaker 3: people of your situation, you might not even be comfortable 227 00:11:06,040 --> 00:11:08,480 Speaker 3: with that. There's also the possibility that you might not 228 00:11:08,520 --> 00:11:11,400 Speaker 3: be able to work. So there are certain professions like 229 00:11:11,520 --> 00:11:15,880 Speaker 3: financial advice, that you're not allowed to work as that 230 00:11:15,920 --> 00:11:20,040 Speaker 3: profession if you're in that situation. And as mentioned before, 231 00:11:20,320 --> 00:11:23,360 Speaker 3: not all debts are covered in debt arrangements, but if 232 00:11:23,360 --> 00:11:25,920 Speaker 3: you fall behind on the payment plan stipulate it in 233 00:11:26,000 --> 00:11:29,720 Speaker 3: your agreement, then creditors do have the ability to repossess 234 00:11:29,800 --> 00:11:32,640 Speaker 3: any assets you have if you've offered them a security 235 00:11:32,679 --> 00:11:36,680 Speaker 3: for credit, so it could end up with you losing stuff, 236 00:11:36,760 --> 00:11:39,480 Speaker 3: even though the reason you've probably entered a debt agreement 237 00:11:39,559 --> 00:11:43,120 Speaker 3: is so that you don't lose your stuff anyway, really 238 00:11:43,160 --> 00:11:46,000 Speaker 3: important to be on top of that, it also means 239 00:11:46,040 --> 00:11:48,880 Speaker 3: that you're probably not going to be able to easily 240 00:11:48,920 --> 00:11:52,240 Speaker 3: access credit in the future, and your details might appear 241 00:11:52,559 --> 00:11:55,800 Speaker 3: and I say might because this sometimes happens and sometimes 242 00:11:55,880 --> 00:11:59,360 Speaker 3: doesn't on a credit reporting agencies records for five or 243 00:11:59,400 --> 00:12:02,520 Speaker 3: more years, and your name will also appear on the 244 00:12:02,640 --> 00:12:07,360 Speaker 3: National Personal Insolvency Index, and how long exactly really depends 245 00:12:07,360 --> 00:12:09,679 Speaker 3: on your situation. So it's one of those things where 246 00:12:09,720 --> 00:12:12,280 Speaker 3: you're like, m is this worth it? What does this 247 00:12:12,400 --> 00:12:15,320 Speaker 3: mean for me? But a lot of people will be 248 00:12:15,320 --> 00:12:17,240 Speaker 3: in a situation where it's like, I just need to 249 00:12:17,240 --> 00:12:20,079 Speaker 3: get out of debt. This is good regardless of what's 250 00:12:20,120 --> 00:12:22,280 Speaker 3: going on. And to be honest, one of the things 251 00:12:22,320 --> 00:12:25,320 Speaker 3: that people who you know, I've held their hand through 252 00:12:25,360 --> 00:12:28,240 Speaker 3: getting debt agreements or like worked with or met, they're like, 253 00:12:28,280 --> 00:12:31,560 Speaker 3: oh my gosh, Victoria, instead of having turned credit cards 254 00:12:31,640 --> 00:12:33,920 Speaker 3: or instead of you know, maybe having a debt I 255 00:12:33,920 --> 00:12:35,839 Speaker 3: can't pay back, you don't have to be that person 256 00:12:35,880 --> 00:12:39,440 Speaker 3: who stereotypically has ten credit cards to actually get a 257 00:12:39,440 --> 00:12:41,960 Speaker 3: debt agreement, they go, await, it has been lifted off 258 00:12:42,040 --> 00:12:44,440 Speaker 3: my shoulders. Instead of having, you know, a couple of 259 00:12:44,520 --> 00:12:46,800 Speaker 3: things to pay off and I've just never been able 260 00:12:46,800 --> 00:12:48,600 Speaker 3: to keep track of it. I've just got one and 261 00:12:48,640 --> 00:12:50,720 Speaker 3: it makes sense, and I've got somebody I can talk 262 00:12:50,760 --> 00:12:53,520 Speaker 3: to when it really helps. Like, this can be a 263 00:12:53,559 --> 00:12:56,800 Speaker 3: really empowering thing. Yeah, but it's also not something that 264 00:12:56,840 --> 00:12:59,080 Speaker 3: you'd agree to if you can actually just pay it 265 00:12:59,080 --> 00:13:00,439 Speaker 3: off and you're trying to get out of it early. 266 00:13:00,640 --> 00:13:01,520 Speaker 3: If that makes sense to. 267 00:13:01,520 --> 00:13:04,640 Speaker 2: You, Yeah, exactly, So it completely depends on your situation. 268 00:13:05,040 --> 00:13:05,400 Speaker 3: Yeah. 269 00:13:05,480 --> 00:13:07,200 Speaker 2: We will be back on the other side of this 270 00:13:07,280 --> 00:13:11,200 Speaker 2: break to discuss the differences between bankruptcy, debt consolidation, and 271 00:13:11,280 --> 00:13:15,240 Speaker 2: debt agreements. Guys, so please don't go anywhere, okay, vickid 272 00:13:15,760 --> 00:13:18,720 Speaker 2: What happens if we've set up our plan with our 273 00:13:18,800 --> 00:13:22,560 Speaker 2: debt agreement administrator and like we've been doing it for 274 00:13:22,640 --> 00:13:24,959 Speaker 2: six months or so, but then we get in there 275 00:13:25,040 --> 00:13:28,200 Speaker 2: and we just can't keep up with the repayments. What 276 00:13:28,240 --> 00:13:29,640 Speaker 2: happens then? Do we go bankrupt? 277 00:13:30,160 --> 00:13:33,240 Speaker 3: No? Not necessarily, there are options there is always a 278 00:13:33,320 --> 00:13:35,000 Speaker 3: light at the end of the tunnel, even if you 279 00:13:35,040 --> 00:13:37,520 Speaker 3: can't see it right now, I promise, And it's really 280 00:13:37,559 --> 00:13:40,600 Speaker 3: important that you remember that there's no such thing as 281 00:13:40,600 --> 00:13:44,040 Speaker 3: completely lost, I promise. But there are a couple of 282 00:13:44,080 --> 00:13:46,640 Speaker 3: options for you if you can't keep up with payments 283 00:13:46,760 --> 00:13:48,960 Speaker 3: or if you no longer want to use the agreement, 284 00:13:49,200 --> 00:13:52,920 Speaker 3: and that's varying or terminating your agreement. Of course, you 285 00:13:53,000 --> 00:13:54,720 Speaker 3: are going to need to talk to your debt Agreement 286 00:13:54,800 --> 00:13:57,840 Speaker 3: administrator and they're going to lash the creditors to sort 287 00:13:57,880 --> 00:13:59,600 Speaker 3: everything out and have a chat about where you're at 288 00:13:59,679 --> 00:14:02,640 Speaker 3: and what going on. The most important thing in this 289 00:14:02,800 --> 00:14:06,960 Speaker 3: situation is communication, And I mean every relationship is based 290 00:14:07,000 --> 00:14:11,440 Speaker 3: on communication. But hot tip hot relationship advice from GMP. 291 00:14:12,480 --> 00:14:15,000 Speaker 3: But if you do choose g to terminate the agreement, 292 00:14:15,040 --> 00:14:18,880 Speaker 3: then it's really important to think about the consequences, like 293 00:14:19,040 --> 00:14:22,600 Speaker 3: that credit can apply to make you bankrupt and creditors 294 00:14:22,640 --> 00:14:25,960 Speaker 3: can commence recovery for the payment of debts that you owe. 295 00:14:26,320 --> 00:14:31,000 Speaker 3: So sometimes g bankruptcy is not a choice. Some other 296 00:14:31,040 --> 00:14:33,280 Speaker 3: people might decide, you know what, No, I'm going to 297 00:14:33,320 --> 00:14:36,960 Speaker 3: take her for ulsh'sworth, and we actually need to send 298 00:14:36,960 --> 00:14:40,040 Speaker 3: her a bankrupt to get back what we need. Your 299 00:14:40,080 --> 00:14:43,680 Speaker 3: contract will also automatically be terminated if you fail to 300 00:14:43,680 --> 00:14:47,280 Speaker 3: make payments for six months after its due, or if 301 00:14:47,280 --> 00:14:50,000 Speaker 3: you don't finish your payments within six months of the 302 00:14:50,240 --> 00:14:53,080 Speaker 3: end of the agreement. So there are a couple of 303 00:14:53,120 --> 00:14:56,320 Speaker 3: things to take into consideration there. Again, as we said before, 304 00:14:56,400 --> 00:14:59,960 Speaker 3: communication is the key here and a lot of people 305 00:15:00,240 --> 00:15:03,320 Speaker 3: during COVID. We really need to stop talking about COVID 306 00:15:03,320 --> 00:15:05,280 Speaker 3: on this podcast because it really triggers me. And I'm 307 00:15:05,320 --> 00:15:09,000 Speaker 3: sure I'm not the only one, but during COVID who 308 00:15:09,040 --> 00:15:11,080 Speaker 3: kind of buried their heads in the sand and found 309 00:15:11,120 --> 00:15:14,240 Speaker 3: themselves in a more sticky situation because they didn't talk 310 00:15:14,280 --> 00:15:17,880 Speaker 3: to their dead agreement administrator when in reality, if you had, 311 00:15:18,040 --> 00:15:20,800 Speaker 3: they would have said, look, this situation is absolutely cooked. 312 00:15:20,840 --> 00:15:22,640 Speaker 3: She can't pay them, or we're going to stretch them out, 313 00:15:22,680 --> 00:15:24,280 Speaker 3: or we're going to put them on hold for a bit. 314 00:15:24,360 --> 00:15:26,840 Speaker 3: Like there is always a way to work through this, 315 00:15:27,080 --> 00:15:29,440 Speaker 3: and it can be really hard and it can feel 316 00:15:29,440 --> 00:15:32,880 Speaker 3: really overwhelming. But I promise, I promise, they promise communicate 317 00:15:33,080 --> 00:15:34,520 Speaker 3: and everything will be okay. 318 00:15:35,200 --> 00:15:38,600 Speaker 2: Yeah, definitely, Sophy, I want to talk to you about 319 00:15:38,960 --> 00:15:44,440 Speaker 2: debt agreement versus bankruptcy versus debt consolidation. So my understanding 320 00:15:44,640 --> 00:15:49,080 Speaker 2: is that probably the first step would be debt consolidation, 321 00:15:50,000 --> 00:15:52,200 Speaker 2: and then if things were a little more serious, you'd 322 00:15:52,280 --> 00:15:56,080 Speaker 2: move into looking at a debt agreement, and then perhaps 323 00:15:56,240 --> 00:15:59,200 Speaker 2: worst case scenario, you'd look at bankruptcy. 324 00:16:00,000 --> 00:16:04,040 Speaker 3: Does that you have a money podcast, Well, you on 325 00:16:04,120 --> 00:16:04,560 Speaker 3: the money? 326 00:16:04,680 --> 00:16:06,520 Speaker 2: Maybe I am on the money you are, But does 327 00:16:06,560 --> 00:16:09,560 Speaker 2: that sound right like? Is that how we stagger our steps? 328 00:16:09,640 --> 00:16:12,960 Speaker 3: Yes, it would be. So first things first, a debt 329 00:16:13,000 --> 00:16:16,560 Speaker 3: consolidation doesn't mean you're in a sticky situation. It just 330 00:16:16,680 --> 00:16:19,680 Speaker 3: means that you're going to consolidate a number of debts together. 331 00:16:20,040 --> 00:16:22,880 Speaker 3: So it might actually be something as simple as, hey, 332 00:16:23,000 --> 00:16:26,160 Speaker 3: I have this car loan it's at fifteen percent, and 333 00:16:26,240 --> 00:16:28,280 Speaker 3: I have a mortgage and that's at two and a 334 00:16:28,320 --> 00:16:31,040 Speaker 3: half percent. I'm going to talk to my home lender 335 00:16:31,240 --> 00:16:34,240 Speaker 3: and you know, consolidate those things together and put my 336 00:16:34,320 --> 00:16:38,520 Speaker 3: car loan into my mortgage. Sometimes that's possible, sometimes it's not, 337 00:16:38,920 --> 00:16:41,840 Speaker 3: but that could be a good financial decision. Maybe you 338 00:16:41,880 --> 00:16:45,680 Speaker 3: made that decision not because you're actually struggling to meet payments, 339 00:16:46,000 --> 00:16:48,400 Speaker 3: but you're actually in a situation where you just wanted 340 00:16:48,400 --> 00:16:50,480 Speaker 3: to save some money, which is a smart thing to do, 341 00:16:50,640 --> 00:16:52,720 Speaker 3: and if you talk to a broker I'm sure that 342 00:16:52,760 --> 00:16:54,680 Speaker 3: they would take you through those steps and go this 343 00:16:54,800 --> 00:16:57,640 Speaker 3: is possible, this isn't possible, but it would put you 344 00:16:57,680 --> 00:17:02,240 Speaker 3: in a better financial situation. The second thing is consolidating 345 00:17:02,280 --> 00:17:04,760 Speaker 3: debt because it is a little bit overwhelming and you've 346 00:17:04,760 --> 00:17:06,960 Speaker 3: got a fair few debts here, there and everywhere, and 347 00:17:07,000 --> 00:17:10,679 Speaker 3: you just want one easy payment. In saying that, not 348 00:17:10,840 --> 00:17:14,480 Speaker 3: every single debt consolidation will be accepted. It's obviously based 349 00:17:14,480 --> 00:17:16,720 Speaker 3: on the risk and what credit you have access to 350 00:17:16,840 --> 00:17:19,359 Speaker 3: and what you actually owe as to whether a bank 351 00:17:19,440 --> 00:17:21,399 Speaker 3: is going to want to take that on or not. 352 00:17:21,920 --> 00:17:26,240 Speaker 3: But again, you could consolidate it, meaning lower repayments potentially 353 00:17:26,280 --> 00:17:29,359 Speaker 3: over a longer period of time, but one payment instead 354 00:17:29,400 --> 00:17:33,280 Speaker 3: of multiple. But you also might do a debt consolidation 355 00:17:33,520 --> 00:17:36,159 Speaker 3: if you really are in a pickle and can't afford it, 356 00:17:36,520 --> 00:17:38,600 Speaker 3: and there are a number of different lenders that actually 357 00:17:38,640 --> 00:17:42,040 Speaker 3: help you through that. So Good Shepherd actually is a 358 00:17:42,040 --> 00:17:46,880 Speaker 3: really good example of a loan that is a debt consolidation, 359 00:17:47,359 --> 00:17:49,800 Speaker 3: but it's actually for people who have found themselves in 360 00:17:49,800 --> 00:17:51,879 Speaker 3: a bit of a pickle, so they have an offering 361 00:17:51,960 --> 00:17:55,000 Speaker 3: called the NILS loan, which is a no interest loan 362 00:17:55,359 --> 00:17:58,000 Speaker 3: and essentially you can borrow money so that you can 363 00:17:58,080 --> 00:18:00,560 Speaker 3: pay it back without the interest, and they'll have a 364 00:18:00,640 --> 00:18:03,560 Speaker 3: chat with you about what that actually means for you. 365 00:18:03,640 --> 00:18:05,920 Speaker 3: So they have a whole heap of different things. They 366 00:18:05,960 --> 00:18:09,680 Speaker 3: have loans for people experiencing family and domestic violence. They 367 00:18:09,720 --> 00:18:13,439 Speaker 3: have loans for people who need financial assistance, loans for 368 00:18:13,520 --> 00:18:16,560 Speaker 3: people who have recently found themselves single, loans for people 369 00:18:16,600 --> 00:18:19,640 Speaker 3: who need a car and can't access one. Like they 370 00:18:19,640 --> 00:18:22,600 Speaker 3: are just obviously Good Shepherd makes them sound like good people, 371 00:18:22,720 --> 00:18:25,520 Speaker 3: because they are, but there are lots of different companies 372 00:18:25,560 --> 00:18:28,320 Speaker 3: who do this. Obviously Good Shepherd has never sponsored us, 373 00:18:28,400 --> 00:18:31,040 Speaker 3: but they are just again good Eggs doing good things. 374 00:18:31,320 --> 00:18:34,360 Speaker 3: Someone who has sponsored us and partnered with the show though, 375 00:18:34,480 --> 00:18:39,760 Speaker 3: is Wiser WISR and they do debt consolidation loans and 376 00:18:40,520 --> 00:18:43,479 Speaker 3: they're They're not like a no interest loans scheme. They 377 00:18:43,520 --> 00:18:47,199 Speaker 3: are just a good business doing good things. But the 378 00:18:47,280 --> 00:18:49,960 Speaker 3: thing that I really like about them and learned about 379 00:18:50,000 --> 00:18:52,240 Speaker 3: them in the process of working with them, that has 380 00:18:52,280 --> 00:18:55,240 Speaker 3: given me essentially mad respect for what they do is 381 00:18:55,280 --> 00:18:59,000 Speaker 3: they really try to understand your personal situation and really 382 00:18:59,080 --> 00:19:01,840 Speaker 3: try to go above them beyond work out what that 383 00:19:01,960 --> 00:19:04,720 Speaker 3: might look like for you and how that could work, 384 00:19:04,960 --> 00:19:07,360 Speaker 3: because they actually want to help and they actually want 385 00:19:07,359 --> 00:19:09,320 Speaker 3: to do good things, so they would be someone that 386 00:19:09,359 --> 00:19:13,560 Speaker 3: I'm contacting as well. And then obviously the National Debt Helpline, 387 00:19:13,560 --> 00:19:14,680 Speaker 3: which we've spoken. 388 00:19:14,400 --> 00:19:18,760 Speaker 2: About before of course, of course, so that's debt consolidation 389 00:19:18,920 --> 00:19:22,040 Speaker 2: v M. We've then got your debt agreement. So when 390 00:19:22,080 --> 00:19:25,040 Speaker 2: things are getting a little more dicey, if. 391 00:19:24,840 --> 00:19:27,399 Speaker 3: You don't know what a debt agreement yet is, just 392 00:19:27,440 --> 00:19:29,760 Speaker 3: like go back to the start of the podcast. I 393 00:19:29,800 --> 00:19:33,000 Speaker 3: did explain it, but sometimes it does take a few goes. 394 00:19:33,119 --> 00:19:35,760 Speaker 3: Let's be honest. Sometimes I listen to things. G Yeah, 395 00:19:35,800 --> 00:19:38,440 Speaker 3: Like I listened to a lot of audio books, honestly, 396 00:19:38,600 --> 00:19:41,440 Speaker 3: not what I've said, Like I never remember what I said. 397 00:19:41,880 --> 00:19:44,400 Speaker 3: But sometimes I listen to audio books and I get 398 00:19:44,400 --> 00:19:46,880 Speaker 3: like three chapters in and then they're like, oh, Georgia 399 00:19:46,960 --> 00:19:49,600 Speaker 3: did X y Z. I'm like, who's Georgia, Like I've 400 00:19:49,640 --> 00:19:53,360 Speaker 3: missed entire pieces of audio, and I'm like, okay, I'm 401 00:19:53,359 --> 00:19:55,080 Speaker 3: going to have to go back and start again. So 402 00:19:55,119 --> 00:19:58,080 Speaker 3: I literally get it. But essentially, a debt agreement is 403 00:19:58,160 --> 00:20:00,320 Speaker 3: that next step. If you're not able to con solid 404 00:20:00,520 --> 00:20:03,800 Speaker 3: you'll loan for any reason, then that would be what 405 00:20:03,840 --> 00:20:06,600 Speaker 3: you're considering. Again, talk to our friends at the National 406 00:20:06,640 --> 00:20:09,240 Speaker 3: Debt Helpline. They will help you. And then when it 407 00:20:09,240 --> 00:20:13,320 Speaker 3: comes to bankruptcy, that's obviously the more significant version of 408 00:20:13,480 --> 00:20:16,800 Speaker 3: a debt agreement, which has a number of different consequences. 409 00:20:17,520 --> 00:20:21,199 Speaker 3: Comparing the two, a debt agreement might actually be for 410 00:20:21,240 --> 00:20:24,280 Speaker 3: you a more suitable alternative because it can benefit the 411 00:20:24,280 --> 00:20:27,440 Speaker 3: creditors that you owe money to as they might actually 412 00:20:27,560 --> 00:20:30,199 Speaker 3: end up receiving more money than if you were to 413 00:20:30,240 --> 00:20:33,760 Speaker 3: go bankrupt. They like a plan, I promise you that's 414 00:20:33,800 --> 00:20:36,080 Speaker 3: not a bad thing. You don't instantly have to jump 415 00:20:36,119 --> 00:20:40,280 Speaker 3: to bankruptcy, and it can provide a level of relief 416 00:20:40,359 --> 00:20:42,800 Speaker 3: to you if you're not actually able to manage your debts. 417 00:20:42,840 --> 00:20:45,360 Speaker 3: But there are some consequences which can affect you, which 418 00:20:45,359 --> 00:20:48,800 Speaker 3: we've obviously already gone over to. But again you'll have 419 00:20:48,880 --> 00:20:51,040 Speaker 3: to work out if you're eligible for this, because there 420 00:20:51,080 --> 00:20:53,560 Speaker 3: are obviously going to be limits and the amount of 421 00:20:53,600 --> 00:20:56,080 Speaker 3: debt and income you have to have to actually be 422 00:20:56,200 --> 00:20:57,080 Speaker 3: eligible for this. 423 00:20:57,359 --> 00:21:02,000 Speaker 2: Yeah, right, the last question for you today, So on 424 00:21:02,040 --> 00:21:05,240 Speaker 2: the whole. Would you say that you would recommend someone 425 00:21:05,240 --> 00:21:08,320 Speaker 2: who is struggling with multiple debts to consider taking part 426 00:21:08,359 --> 00:21:11,040 Speaker 2: in a debt agreement if they've already considered the other 427 00:21:11,119 --> 00:21:14,480 Speaker 2: options and you know, maybe they've looked at debt consolidation 428 00:21:14,560 --> 00:21:16,520 Speaker 2: and it's not going to do the job for them. 429 00:21:16,800 --> 00:21:19,719 Speaker 3: Look, I would, but again I would be really wary 430 00:21:19,840 --> 00:21:23,960 Speaker 3: because these are significant outcomes. It's not like, gee, go 431 00:21:24,000 --> 00:21:26,320 Speaker 3: and get this loan. It's going to solve all your problems, Like, 432 00:21:26,520 --> 00:21:29,720 Speaker 3: that's not what a debt agreement is. Like, this is 433 00:21:29,760 --> 00:21:32,959 Speaker 3: a very serious thing to be taken very seriously, Like 434 00:21:32,960 --> 00:21:35,320 Speaker 3: you're going to be on national registers. It's going to 435 00:21:35,359 --> 00:21:39,320 Speaker 3: impact your credit score significantly. In saying that if you 436 00:21:39,560 --> 00:21:43,120 Speaker 3: are considering a debt agreement, I would, you know, take 437 00:21:43,119 --> 00:21:45,000 Speaker 3: a stab in the dark and say that you probably 438 00:21:45,040 --> 00:21:47,720 Speaker 3: don't have a good credit score to begin with, but 439 00:21:48,240 --> 00:21:51,960 Speaker 3: long term, that will become something that is applicable. Like 440 00:21:52,000 --> 00:21:53,840 Speaker 3: if you're in a situation where you're like, oh my gosh, 441 00:21:53,840 --> 00:21:56,640 Speaker 3: I could just buckle down and pay this debt off 442 00:21:56,680 --> 00:21:59,960 Speaker 3: really aggressively over the next couple of years and then 443 00:22:00,000 --> 00:22:01,359 Speaker 3: there are no ramifications. 444 00:22:01,680 --> 00:22:03,840 Speaker 2: Great, but once. 445 00:22:03,640 --> 00:22:06,560 Speaker 3: You've paid off that debt and you've done a debt agreement, 446 00:22:06,720 --> 00:22:09,439 Speaker 3: it's actually going to be on your quote like file 447 00:22:09,680 --> 00:22:12,199 Speaker 3: for a fair few years after that, which is going 448 00:22:12,240 --> 00:22:14,200 Speaker 3: to stop you from being able to buy a property 449 00:22:14,440 --> 00:22:16,639 Speaker 3: or being able to do, you know, the things you 450 00:22:16,680 --> 00:22:18,960 Speaker 3: want to do in life. And I'm not saying that 451 00:22:18,960 --> 00:22:21,439 Speaker 3: that's the worst thing ever, because for some people this 452 00:22:21,600 --> 00:22:24,720 Speaker 3: is incredibly freeing, like it puts them in a situation 453 00:22:24,800 --> 00:22:28,320 Speaker 3: where they're back in control, and there's nothing better than 454 00:22:28,359 --> 00:22:31,040 Speaker 3: being in control of your finances. So if that was 455 00:22:31,119 --> 00:22:34,320 Speaker 3: the case, absolutely, but a lot of people might just 456 00:22:34,400 --> 00:22:37,119 Speaker 3: really have tunnel vision. They'll go, Gee, I'm never going 457 00:22:37,200 --> 00:22:38,760 Speaker 3: to be able to afford property, I'm never going to 458 00:22:38,800 --> 00:22:40,400 Speaker 3: be able to do this or that, and I don't 459 00:22:40,440 --> 00:22:43,560 Speaker 3: need credit, and then they enter into a debt agreement 460 00:22:43,600 --> 00:22:46,760 Speaker 3: for the next five years, and once your dead agreement finishes, 461 00:22:46,840 --> 00:22:48,520 Speaker 3: you're going to be on the register for at least 462 00:22:48,560 --> 00:22:51,280 Speaker 3: another five years. You're going to meet a partner, maybe 463 00:22:51,280 --> 00:22:54,720 Speaker 3: they have significant savings, and then you're not able to 464 00:22:54,760 --> 00:22:57,200 Speaker 3: get a home loan because of that. So I think 465 00:22:57,200 --> 00:23:00,720 Speaker 3: that you need to remember, like things can change significantly, 466 00:23:00,800 --> 00:23:02,679 Speaker 3: And I'm not saying we need to be reliant on 467 00:23:02,760 --> 00:23:05,840 Speaker 3: a partner to buy property or do something in any way, 468 00:23:05,880 --> 00:23:08,199 Speaker 3: shape or form. But a debt agreement is serious. I 469 00:23:08,200 --> 00:23:11,480 Speaker 3: hopefully getting those vibes out there, but it is something 470 00:23:11,480 --> 00:23:15,040 Speaker 3: I would want you to consider before considering bankruptcy. Like 471 00:23:15,119 --> 00:23:18,960 Speaker 3: that is absolutely something. Is it going to work for you? No? Okay, 472 00:23:19,200 --> 00:23:23,000 Speaker 3: now let's consider bankruptcy because these things, as much as 473 00:23:23,000 --> 00:23:27,520 Speaker 3: they are dramatic, can be incredibly freeing. Like I can't 474 00:23:27,560 --> 00:23:30,200 Speaker 3: tell you the amount of people who have been in 475 00:23:30,400 --> 00:23:33,320 Speaker 3: so much debt. Like you know, I'm not going to 476 00:23:33,400 --> 00:23:36,600 Speaker 3: share too much about my clients obviously, because the things 477 00:23:36,640 --> 00:23:39,760 Speaker 3: I have told you guys thus far are really non identifiable. 478 00:23:39,800 --> 00:23:44,120 Speaker 3: But I remember talking to one person. This was years ago, 479 00:23:44,760 --> 00:23:48,159 Speaker 3: and they were in more than two hundred and fifty 480 00:23:48,200 --> 00:23:50,840 Speaker 3: thousand dollars worth of credit card debt. And this was, 481 00:23:51,080 --> 00:23:54,199 Speaker 3: you know, pre real commission, so there was obviously a 482 00:23:54,240 --> 00:23:57,560 Speaker 3: lot more leniency on lending and being able to access credit. 483 00:23:57,920 --> 00:24:00,399 Speaker 3: And they had bounced from one credit card to another 484 00:24:00,400 --> 00:24:03,439 Speaker 3: credit card to another credit card. And when I was like, 485 00:24:03,840 --> 00:24:06,840 Speaker 3: how did this even happen? Like you shouldn't have got 486 00:24:06,840 --> 00:24:08,760 Speaker 3: this because of your credit report, They're like, oh, you 487 00:24:08,800 --> 00:24:10,560 Speaker 3: just don't tell them about the other credit cards, and 488 00:24:10,560 --> 00:24:14,159 Speaker 3: I was like, what, Like, my mind was blown. But 489 00:24:14,760 --> 00:24:17,880 Speaker 3: when you calculated that debt, because obviously it had such 490 00:24:17,880 --> 00:24:20,600 Speaker 3: a high interest rate, we worked out it was going 491 00:24:20,640 --> 00:24:23,280 Speaker 3: to take her one hundred and eight years paying the 492 00:24:23,320 --> 00:24:26,159 Speaker 3: minimum repayments to get out of debt, and she couldn't 493 00:24:26,200 --> 00:24:30,119 Speaker 3: even afford the minimum repayments. So we were definitely considering 494 00:24:30,160 --> 00:24:32,679 Speaker 3: a debt agreement. But then when we worked out what 495 00:24:32,760 --> 00:24:34,840 Speaker 3: that actually looked like, it wasn't going to work, so 496 00:24:34,880 --> 00:24:37,720 Speaker 3: we went down the bankruptcy route. In saying that that's 497 00:24:37,760 --> 00:24:40,600 Speaker 3: a very dramatic example. It is not the norm. It 498 00:24:40,680 --> 00:24:43,160 Speaker 3: is not what the normal people getting a debt agreement 499 00:24:43,240 --> 00:24:45,919 Speaker 3: looks like. Often it can look like a mum and 500 00:24:46,000 --> 00:24:48,200 Speaker 3: dad who have been trying to get their kids through school, 501 00:24:48,320 --> 00:24:50,800 Speaker 3: have gone through a lot of stuff through COVID, have 502 00:24:50,920 --> 00:24:53,960 Speaker 3: you know, got a mortgage, got a couple of personal loans, 503 00:24:54,000 --> 00:24:56,000 Speaker 3: and maybe not stayed on top of their budget and 504 00:24:56,040 --> 00:24:59,159 Speaker 3: cash flow. Who are considering this So it's not, you know, 505 00:24:59,560 --> 00:25:02,920 Speaker 3: always the most rheumatic stories. It could actually just be 506 00:25:02,960 --> 00:25:05,000 Speaker 3: a mum and dad trying to do their best and 507 00:25:05,040 --> 00:25:07,159 Speaker 3: this is a really great outcome for them because it 508 00:25:07,240 --> 00:25:10,360 Speaker 3: stops them from losing their home. So I just want 509 00:25:10,359 --> 00:25:12,359 Speaker 3: to make sure that you guys know, there's lots of 510 00:25:12,400 --> 00:25:15,320 Speaker 3: different situations that are applicable to this. But if you 511 00:25:15,359 --> 00:25:19,240 Speaker 3: are feeling overwhelmed with debt in any way, shape or form, 512 00:25:19,600 --> 00:25:22,359 Speaker 3: I would be sitting down going, Okay, what does my 513 00:25:22,400 --> 00:25:24,679 Speaker 3: budget look like? Doing a little bit of homework so 514 00:25:24,720 --> 00:25:27,560 Speaker 3: you know what's coming into your bank account, know what's 515 00:25:27,600 --> 00:25:30,680 Speaker 3: going out of your bank account. And then if you're 516 00:25:30,720 --> 00:25:34,040 Speaker 3: still like, look, I can't do this National Debt Helpline 517 00:25:34,200 --> 00:25:38,159 Speaker 3: Free financial Counselors, I promise you they've never paid me 518 00:25:38,200 --> 00:25:40,000 Speaker 3: a dollar, but like it sounds like they pay me 519 00:25:40,040 --> 00:25:40,360 Speaker 3: a lot. 520 00:25:40,359 --> 00:25:43,959 Speaker 2: Hey, they do get many a shout out. Okay, V 521 00:25:44,160 --> 00:25:46,040 Speaker 2: I do think that is all we have time for. 522 00:25:46,280 --> 00:25:49,280 Speaker 3: I think it is. This has become a Ted talk again. 523 00:25:49,680 --> 00:25:51,439 Speaker 2: I loved it. I loved it as per. 524 00:25:51,400 --> 00:25:53,760 Speaker 3: Look, I'm just really passionate about it, and debt is 525 00:25:53,760 --> 00:25:57,080 Speaker 3: something that I think is so stigmatized and often if 526 00:25:57,119 --> 00:26:00,280 Speaker 3: you're you know, considering this or it's been suggested a 527 00:26:00,280 --> 00:26:02,760 Speaker 3: financial counselor, it can send you into a little bit 528 00:26:02,800 --> 00:26:05,280 Speaker 3: of a spin because you'll feel, oh my gosh, I've 529 00:26:05,320 --> 00:26:07,520 Speaker 3: failed or I'm not good enough, or I've done the 530 00:26:07,520 --> 00:26:10,439 Speaker 3: wrong thing, or if really messed up, like you haven't, 531 00:26:10,760 --> 00:26:13,479 Speaker 3: I promise you. Debt is really hard and it's so 532 00:26:13,640 --> 00:26:16,240 Speaker 3: easy to get into, and it is not a reflection 533 00:26:16,359 --> 00:26:20,280 Speaker 3: of who you are personally at all. Like anybody's money 534 00:26:20,280 --> 00:26:23,080 Speaker 3: situation is not a reflection of who they are as 535 00:26:23,080 --> 00:26:24,800 Speaker 3: a person. Like as long as you are kind and 536 00:26:24,840 --> 00:26:26,879 Speaker 3: as long as you are nice to everybody that crosses 537 00:26:26,920 --> 00:26:29,240 Speaker 3: your path, Like I think that that's all we ever 538 00:26:29,480 --> 00:26:32,480 Speaker 3: care about, or all I ever care about. But I 539 00:26:32,480 --> 00:26:34,720 Speaker 3: think it's really important to remember that if you're going 540 00:26:34,760 --> 00:26:39,040 Speaker 3: into a situation where you're considering bankruptcy or a debt agreement, 541 00:26:39,359 --> 00:26:41,840 Speaker 3: that doesn't reflect on you badly. In fact, it takes 542 00:26:41,880 --> 00:26:44,520 Speaker 3: a really strong person to realize the situation they're in 543 00:26:44,880 --> 00:26:46,520 Speaker 3: and create a solution to get out of it. 544 00:26:46,840 --> 00:26:49,199 Speaker 2: I'm going to sneak one last question in just to 545 00:26:49,400 --> 00:26:51,080 Speaker 2: end on a positive note. 546 00:26:51,000 --> 00:26:51,680 Speaker 3: Yeah, go for it. 547 00:26:51,760 --> 00:26:54,160 Speaker 2: What ended up happening with your client who did file 548 00:26:54,200 --> 00:26:56,480 Speaker 2: for bankruptcy? Did it all work out? Okay? Oh? 549 00:26:56,520 --> 00:27:01,240 Speaker 3: Absolutely. I'm not their advisor anymore. I don't have anything 550 00:27:01,280 --> 00:27:03,240 Speaker 3: to do with them, which is a bit sad. But 551 00:27:04,200 --> 00:27:07,120 Speaker 3: last time we left them, they were Okay, they had 552 00:27:07,280 --> 00:27:10,160 Speaker 3: filed for bankruptcy and they were going through the process. 553 00:27:10,480 --> 00:27:13,880 Speaker 3: The thing that was most empowering about that was they 554 00:27:13,960 --> 00:27:17,320 Speaker 3: filed for bankruptcy. They didn't wait until a bank sent 555 00:27:17,359 --> 00:27:20,600 Speaker 3: them into bankruptcy. And that meant a few things. It 556 00:27:20,680 --> 00:27:23,199 Speaker 3: meant that they were in control of the process and 557 00:27:23,280 --> 00:27:25,920 Speaker 3: how it worked. They weren't forced out of their home 558 00:27:26,000 --> 00:27:28,520 Speaker 3: at the last minute. They weren't you know, having their 559 00:27:28,520 --> 00:27:32,040 Speaker 3: door knocked down by creditors. It was a situation where 560 00:27:32,280 --> 00:27:34,760 Speaker 3: they could be more in control of a situation that 561 00:27:34,840 --> 00:27:37,760 Speaker 3: was already out of control. So I think it's really 562 00:27:37,800 --> 00:27:40,680 Speaker 3: important to realize, like, don't stick your head in the sand. 563 00:27:40,800 --> 00:27:44,520 Speaker 3: You can save you know, a portion of it, or like, 564 00:27:44,720 --> 00:27:46,439 Speaker 3: you know, we found a way. They did have to 565 00:27:46,440 --> 00:27:48,960 Speaker 3: sell their home, but that was on their terms, like 566 00:27:49,040 --> 00:27:51,080 Speaker 3: they got to list it up for sale and pay 567 00:27:51,119 --> 00:27:53,879 Speaker 3: back their debt instead of having it go through a 568 00:27:53,920 --> 00:27:56,480 Speaker 3: bank and have the bank sell it, which more often 569 00:27:56,520 --> 00:27:58,600 Speaker 3: than not will mean that you get a lower return 570 00:27:58,680 --> 00:28:00,000 Speaker 3: for it because they just want to flog it off 571 00:28:00,080 --> 00:28:00,679 Speaker 3: really quickly. 572 00:28:00,800 --> 00:28:04,639 Speaker 2: Yeah right, Okay, hopefully that helps. No, that's great, that's 573 00:28:04,640 --> 00:28:06,960 Speaker 2: that's good to hear. Alrighty V I think now it's 574 00:28:07,000 --> 00:28:09,200 Speaker 2: actually like, that's actually all we have time for now. 575 00:28:09,320 --> 00:28:13,800 Speaker 3: Actually really we questions done, normal questions from Georgia. But 576 00:28:14,000 --> 00:28:16,439 Speaker 3: as always, just before we head off, we'd like to 577 00:28:16,480 --> 00:28:20,160 Speaker 3: acknowledge and pay respect to Australia's Aboriginal and Torrest Straight 578 00:28:20,240 --> 00:28:23,800 Speaker 3: Island to peoples, they're the traditional custodians of the lands, 579 00:28:23,800 --> 00:28:27,480 Speaker 3: the waterways and the skies all across Australia. We thank 580 00:28:27,520 --> 00:28:29,359 Speaker 3: you for sharing and the caring for the land on 581 00:28:29,400 --> 00:28:31,720 Speaker 3: which we are able to learn. We pay respects to 582 00:28:31,760 --> 00:28:34,479 Speaker 3: elders past and present, and we share our friendship and 583 00:28:34,560 --> 00:28:35,399 Speaker 3: our kindness. 584 00:28:35,600 --> 00:28:38,120 Speaker 2: And remember, guys, that the advice shared on She's on 585 00:28:38,200 --> 00:28:40,920 Speaker 2: the Money is general in nature and does not consider 586 00:28:41,000 --> 00:28:44,960 Speaker 2: your individual circumstances. She's on the Money exists purely for 587 00:28:45,120 --> 00:28:48,160 Speaker 2: educational purposes and should not be relied upon to make 588 00:28:48,200 --> 00:28:52,600 Speaker 2: an investment or a financial decision. And we promise Victoria 589 00:28:52,640 --> 00:28:56,600 Speaker 2: Divine is an authorized representative of Australia Pacific Funds Management 590 00:28:56,840 --> 00:29:00,960 Speaker 2: Proprietary Limited ABN three four one three two four six. 591 00:29:01,280 --> 00:29:04,480 Speaker 3: Now I'm keeping it two five seven AFSEL three three 592 00:29:04,560 --> 00:29:08,320 Speaker 3: nine one five one. But as I mentioned, g as 593 00:29:08,320 --> 00:29:11,000 Speaker 3: of twenty twenty two, we'll have some sexy new numbers 594 00:29:11,040 --> 00:29:13,520 Speaker 3: to throw your way, and hopefully you can remember them 595 00:29:13,520 --> 00:29:14,320 Speaker 3: a little bit better. 596 00:29:14,640 --> 00:29:17,640 Speaker 2: Does that mean I don't have to say proprietary limited anymore? 597 00:29:17,760 --> 00:29:20,280 Speaker 3: Oh no, you'll still have to say proprietary limited. 598 00:29:20,560 --> 00:29:21,600 Speaker 2: See lady, guys. 599 00:29:21,920 --> 00:29:33,040 Speaker 1: Whye bye guys,