Tame Your Debt Using These Negotiation Tactics

Dominique Grubisa
Dominique Grubisa

Published 4:52 am 23 Jul 2020

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Financial pressure from the COVID-19 crisis is pushing ever-increasing numbers of Australians into debt which they cannot repay. While some will go bankrupt, others will use smart negotiation tactics to reduce or cancel their debts and rebuild their lives, writes DGI Founder and CEO Dominique Grubisa.

Australia may not dominate the tennis or swimming like it once did, but there’s one area where we remain among the best in the world: accumulating debt. Year after year, we are consistently the top one or two in the world in terms of household debt, vying with the Danes and the Swiss for the top position. According to recent figures, our debt-to-GDP ratio is 125 per cent, meaning we owe far more than we produce as a nation.

This situation would be troublesome at any time, but the COVID pandemic has put a whole new complexity on things. With hundreds of thousands of Australians losing their jobs, unprecedented numbers of people are having trouble paying their bills and keeping up with their debt obligations. A whopping 1.4 million Australians are now under mortgage stress, meaning they are struggling to meet their house repayments. On top of mortgages, about two-thirds of Australians owe money (totalling close to $20 billion) to finance and credit card, providers.

Hundreds Of Thousands In Debt Written Off

If the coronavirus lay-offs and economic downturn have pushed you into a debt situation that feels unmanageable, don’t panic. Firstly, know that you are not alone. Many thousands of Australians are either in this situation or will be soon. Your situation reflects changes in the wider world and is nothing to be ashamed of. Secondly, don’t give up hope. While you may feel like chucking in the towel and going bankrupt, there are other courses of action that won’t result in the trauma & loss of control of bankruptcy & black mark on your credit record and ability to rebuild. The DG Institute has many times worked with indebted individuals to write off tens and hundreds of thousands of dollars of debts. More on those in a second.

If you are behind with your repayments on unsecured loans, such as those to credit card providers and finance companies, one of the uncomfortable new additions to your life is likely to be debt collectors. You should never accept bad behaviour on their part. Two regulatory bodies, the Australian Competition and Consumer Commission (ACCC) and the Australian Securities and Investment Commission (ASIC) have guidelines in place covering the conduct of debt collectors. Debt collectors have no right to embarrass or harass you in person or on the phone and cannot give you misleading advice.

You Are In Control

A key thing to understand about your debt is that you are in a stronger position than you may realise. It takes creditors significant resources and energy to change the status quo by repossessing your house or taking you to court. Most would prefer to find a simpler solution. The smartest course of action is to negotiate. Negotiating involves contacting each of your creditors and arranging a meeting to explain the situation to see what can be done. You’re likely to find some creditors are keen to move forward and arrive at a solution while others are more stubborn, meaning you’ll need to look for another way over, around, under or through the obstacle. In many cases, fundamental flaws in the way the debt was issued may provide you with a strong negotiation tool. While it sounds simple, facing up to your debt obligations rather than running away from them can help you slash and often completely eliminate the money you owe. It just takes time and persistence.

If You’re in Debt

Being in debt places you into a precarious financial situation which can quickly snowball into a catastrophe.

One of the clients at DGI Debt Management was a business owner and the primary provider for his family, when the pandemic hit and dramatically reduced his income. In order to continue paying his bills and putting food on the table, he began to take on more debt than he could afford and quickly found himself with $20,642 in debt.

The Debt Management team was able to reduce his debt down to just $3,759, cutting 82% of his total debt off and giving him the breathing room he needed to get back on his feet.

On top of that, he no longer had to worry about the possibility of bankruptcy, or having to deal with creditors anymore.

To find out if the Debt Management team can improve your debt situation, visit DGI Debt Management today.

Good Debt Vs Bad Debt With Dominique Grubisa - DG Institute

Lawyer, Asset Protection Specialist and Property Educator

Dominique Grubisa is a practicing lawyer with over 25 years experience. She is a property investor and developer, an entrepreneur with businesses in Australia and Southeast Asia, a speaker, educator, writer and published author.

This column has been written for general information purposes only. It is not intended as legal, financial or investment advice and should not be construed or relied on as such.

About DG Institute

Founded in 2009, DG Institute strives to empower everyday Australians to grow and protect their wealth. Our goal is to provide direction, motivation and inspiration to our clients and help them perform at their very best. We do that through our professional services, in addition to teaching them how to grow their wealth through property and business education.

This column has been written for general information purposes only. It is not intended as legal, financial or investment advice and should not be construed or relied on as such.

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