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Household debt concerns rise

I saw this article recently.

What we are being told is that number of Aussie households predicting debt trouble has doubled according a recent Household Financial Comfort Report.

Doing a bit of research I found out that there are about 9 million households.

The report says 65% of households have debt, so that is about 5.85 million households.

The report goes onto say that 10% of these households, so around 585,000 households expect they won’t be able to meet minimum debt payments in the next 6 – 12 months.

We receive phone calls and emails daily from some of these households.

Low interest rates have bought relief to mortgage holders for sure, but those who use credit cards to get by, say paying for groceries, car rego and normal household bills have not seen their interest costs come down by any meaningful amount.

For a lot of these same people rents are rising, utilities costs are rising, insurances and the general the cost of living goes onwards and upwards.

If you are renting in Sydney, Melbourne or Brisbane the property boom means nothing to you, other than higher rents sooner or later.

So if borrowing haven’t fallen for you and other costs are rising then I can see why a lot of people are wondering if they really can manage their debt over the next six months to twelve months.

The question therefore has to be what other options are there ?

For people with genuinely unmanageable debt then the personal insolvency system in Australia might provide some options worthy of consideration.

Perhaps some of the people in the survey, those under the most pressure might find that resetting (via a Bankruptcy Application) and moving on from debt that has become unmanageable might provide relief and the ability to, in essence, start again, if only they knew how.

A Debt Agreement may also be worth considering for some of those people, perhaps those who find Bankruptcy to much of a big step.  Realistically, the terms of the Debt Agreement would have to be affordable before the Debt Agreement could be of any real benefit.

household-debt

Household debt concerns rise

household-debt

I saw this article recently.

What we are being told is that number of Aussie households predicting debt trouble has doubled according a recent Household Financial Comfort Report.

Doing a bit of research I found out that there are about 9 million households.

The report says 65% of households have debt, so that is about 5.85 million households.

The report goes onto say that 10% of these households, so around 585,000 households expect they won’t be able to meet minimum debt payments in the next 6 – 12 months.

We receive phone calls and emails daily from some of these households.

Low interest rates have bought relief to mortgage holders for sure, but those who use credit cards to get by, say paying for groceries, car rego and normal household bills have not seen their interest costs come down by any meaningful amount.

For a lot of these same people rents are rising, utilities costs are rising, insurances and the general the cost of living goes onwards and upwards.

If you are renting in Sydney, Melbourne or Brisbane the property boom means nothing to you, other than higher rents sooner or later.

So if borrowing haven’t fallen for you and other costs are rising then I can see why a lot of people are wondering if they really can manage their debt over the next six months to twelve months.

The question therefore has to be what other options are there ?

For people with genuinely unmanageable debt then the personal insolvency system in Australia might provide some options worthy of consideration.

Perhaps some of the people in the survey, those under the most pressure might find that resetting (via a Bankruptcy Application) and moving on from debt that has become unmanageable might provide relief and the ability to, in essence, start again, if only they knew how.

A Debt Agreement may also be worth considering for some of those people, perhaps those who find Bankruptcy to much of a big step.  Realistically, the terms of the Debt Agreement would have to be affordable before the Debt Agreement could be of any real benefit.

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