In debt. want to get out of it.

hi folks,
i need some advice on debt consolidation. i had a business and i was acting as a sole trader. had a big downfall and lost all the market. i was using 3 personal credit cards at that time. now its been 2 years, i hav shut down the business and trying to work for a company. I owe $15'000 to bank (one bank-ANZ). they sold my account to a finance and debt collection company. now i'm in middle of a conversation with this debt collection agency to come up with some sort of agreemented amount. Now i want toknow whats the easy way to pay it off. shall i agree to an amount with this company or shall i get into debt agreement. I have spoken to debt relief and they advised that since i earn only $500 a week after tax , bankrupcy is the only option for me.
I have a confusion, if me and debt collection agency come with a figure )lets say $8000) will have to pay in full?

please help me as i'm a novice in finances.

second thing, i want to invest some money in fund or share so that after some time i can pay the debt. i can save about $1200 every month in that fund or share.

 

Sorry Sid, it just doesn't add up. If you earn $500 a week, thats $2000 a month. If you are spending a welfare equivilant( $1200), then you only have $800 to save every month.

Whatever you can save, pay the debt down first! Don't go bankrupt for $15000. Then, you can think about investing.




Johny.

 

hi Johny.
thanks for your reply. what I was trying t say is that i can contribute $1200 to either debt or funds. so if i put this money in funds which may grow at some stage and than i pay the debt with the increased amount.
so i'm literally confused as i dont know anything about funds or investing the money

 

Sid,

I know where you are coming from. A long time ago I had a massive credit card debt. A family member would match my payment, with this one provision; that I lower my credit limit as the debt dropped. I learnt my lesson. My limit is only 1K now, and I always pay it off each month.

Considering the market at the moment, I'd use your savings to pay your debt. Investing is long term but you need short term cash. The debt agency is not going to wait a decade to get their money back. Use the next couple of years to learn about money management. Read every thread on this forum. Use the internet to learn about asset allocation, index funds, ETFs, asset classes, managed funds and shares. It will be time well spent.

Do you have any specific questions I might help you with?



Johny.

 

hi Johny.
my credit rating is already been disturbed heavily. i think i should contact a financial adviser to learn bit more about funds and other stuff. but thanks very much again. i appriciate your suggesions. just a quick one, if me and the debt collection agency come to an agremented amount, will i have to pay that in full?

 

I've gone through five financial planners. Mostly, they have tried to sell me their own products. If you don't want to be manipulated, do your own research! Take the time to learn for yourself.

Come to an agreement with the agency and commit to it. You can breathe fully when you don't owe anything to anybody. You're too young to bankrupt! It would scar you for years.


Best of luck,
Johny.

 

thanks a lot Johny. i will be in contact with you because what i'm thining is divide my saving into 2 and put one half for debt and other half for savings.
i will be in contact with you regarding the managed fund i wanna put money in.

 

Second thing is always after first trouble have been fixed. Spending a few years to know yourselves and stock market, put a little and absolute affordable capital into the market for a while to check your market business model, and then put it in your action list. If we could not run a business good, we could make another disaster before we change enough.

Stock market could be a money tree or slaughter table. Most of us put our money on the slaughter table not lay the seeds for the money tree. We have our own problems about the money!