Debt settlement negotiations

Success Story: Cactus Consulting negotiate debt settlement to avoid bankruptcy

The client’s problem 

We were recently referred a client who was being pursued for a debt by Timbercorp Finance Pty Ltd (‘Timbercorp’). The debt totalled over $130,000 including interest, which was continuing to accrue.

The client had limited assets, outside of superannuation. He also had a small number of other credit card debts he was able to manage. The client was over 65 and was able to access his superannuation, if required.

When we met with the client, we discussed with him:

  • His options were to either go bankrupt or negotiate a settlement with Timbercorp.
  • To settle the debt owed to Timbercorp he would likely have to access funds in his superannuation.
  • If he went bankrupt, he would be able to keep his superannuation.
  • It was up to him to decide on a course of action, however, we could assist with negotiations with Timbercorp if necessary.

The client’s chosen solution

After considering his options, the client decided that he would like to seek to settle the debt owed to Timbercorp. He did this because, even though bankruptcy would have limited financial effect, he wished to avoid the stigma of bankruptcy and certain risks that it may have involved.

The client engaged us and we wrote to Timbercorp and advised them of the client’s financial position. We also advised there would likely be no funds paid to them if the client went bankrupt. We were able to make this assessment based on our experience in administering bankruptcies.

We initially made an offer to Timbercorp of $20,000 to settle all debts owed. Timbercorp asked for further information regarding our client’s financial position. We provided this information to assist Timbercorp make an assessment of our client’s offer. Timbercorp then engaged solicitors and a number of counter offers were made.

Successful outcome

After various offers the debt to Timbercorp, which was over $130,000 was subsequently settled for $30,000. The client had to pay this amount via an initial upfront payment from funds accessed from his super and then instalments over time. The client was delighted with this outcome as it meant that he would avoid bankruptcy. The offer also represented a good result for Timbercorp as it was more than they would have got in bankruptcy. So the settlement represented a ‘win, win’ scenario.

Contact us for assistance

If you are struggling with debts and concerned about bankruptcy we can help. Get in touch on 1300 906 966 or send us an email at mail@cactusconsulting.com.au to have a free confidential initial discussion today.

Posted on 29-02-20 in Bankruptcy Assistance, Personal finance insights and updates, Personal Insolvency Agreements.