Personal Debt

You’re probably feeling fearful and scared about dealing with your personal debt situation, to the point where you avoid answering your phone. You may have made the error of thinking you could pay off your debt through your current income, only for other expenses to have emerged (or for your income to have unexpectedly reduced).

Whatever the reason, LemonAide is here to help provide the correct answers at the right time. Remember that every client’s needs are unique, which is why we never take a one size fits all approach.

                  You can find two case studies below, showing how we help people and how we may be able to support you.   

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When accumulating debt becomes too much

When Jackie came to us, she was worried that all her neighbours, friends, and colleagues – as well as the other mothers at her daughters’ school – were going to find out about her dire financial situation. She lived in a small country town and thought that bankruptcy was advertised to the public.

Jackie owned a small clothing store in the neighbouring small town. The business had not worked out as planned and was forced to in 2017 due to a lack of sales. Jackie had just enough money to pay the landlord of the premises but still owed suppliers for months of inventory – not to mention a significant tax debt. Jackie had traded through the business as a sole trader because it was free to set up an ABN, but it meant she had personally taken on the debt.

The suppliers sent many nasty letters and even threatened to bankrupt Jackie, though they never followed through with it. The reason was simple: it would cost them far more money than they wanted.

During our initial conversation, I looked at Jackie’s position to discover she was on minimum wage and living paycheck to paycheck. It meant there was no war chest to strike up a deal with the suppliers or the ATO. I explained that with her level of income and 2 children under her car, she would not be paying income contributions to her bankrupt estate.

I also calculated that it would take at least 12 years to pay all the debts, assuming neither the suppliers nor the ATO would charge any interest. The best option would be to leverage the bankruptcy regime for 3 years to deal with all the debts, which Jackie agreed with.

We helped Jackie prepare for her bankruptcy, complete her bankruptcy form, and answer any questions from the bankruptcy trustee. Not only this, but we also supported her to remain compliant with all her obligations, allowing her to be discharged on time (i.e. within the 3 years).

So, if you have debts you can’t tackle within 10 years – let alone pay them all in 3 years – this route may be for you.

LemonAide is here to walk you through the process, explaining how declaring bankruptcy may affect you and any assets you have. Fill out the form below, and we will be in touch to discuss the best option to take!

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Your debt doesn’t always lead to bankruptcy

When we first spoke to Kamal, he was certain he wanted to go bankrupt. He and his father had personally guaranteed a significant contract with a finance company, which had liquidated Kamal’s civil engineering company a mere 8 months earlier. The finance company had dragged Kamal and his father in and out of court ever since.

Once we found out Kamal owed $77,000 and had already opened a new company to run the business, we asked if any attempted negotiations had taken place. It’s important to note that before immediately reverting to bankruptcy, we investigate every other option that may be viable for the client over the long term. We then asked if we could attempt a negotiation with the finance company, and Kamal handed us the green light.

When we first approached the finance company, they informed us that any deal would be off the cards – unless the debt was paid in full before the next court date in 4 days. LemonAide pointed out that if the finance company were to bankrupt Kamal and his father, there would be no personal assets to satisfy the debt of the finance company.

After going back and forth over the next few days, we settled on Kamal and his father paying a total of $50,000, broken down into $10,000 per month for the next 5 months. We also negotiated that Kamal could retain some items of the financed equipment. We made sure that this payment arrangement was viable for Kamal and that he wouldn’t fall at the first or any hurdle.

We saved our client $27,000 – but this wasn’t all. We bought enough time for them to pay the debt and save the new company and some of the assets it used in day-to-day operations.

While we can’t guarantee what your outcome will be, we can confidently say that we will improve your long-term financial future through our expert strategies and assistance.

Everything starts with a conversation, so let’s walk through your options before deciding which is the best. Complete the form below, and we will be in touch soon!

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