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Frequently Asked Questions

 

Who can help me get out of debt?

ChapterTwo is here to help. We are there with you every step of the way; always offering support, advice and relieving you of stress as we bring you out of your debt cycle. We will look to freeze your interest, we will give you more time to pay your debt, and we will negotiate with your creditors for a reduced final settlement.

ChapterTwo can negotiate an informal arrangement for most unsecured debts based on a pro-rata distribution of your available income, after any priority debts or essential household spending is taken into account. If you can identify any of these outstanding debts, you should contact ChapterTwo immediately:

– Credit cards
– Unsecured or personal loans
– Store cards
– Debt owed after repossession
– Disconnected utility bills
– Phone bills
– Accounts in collections.

 

What is an informal agreement?

An informal arrangement is an agreement between you and your creditors. These agreements between you and your creditor are not bound by legislation or formalised by contract. ChapterTwo will work as an intermediary between you and your creditors to look to freeze interest on your accounts and in turn negotiate a settlement on your behalf. It is beneficial to have a professional when dealing in complicated negotiations and ChapterTwo have experienced staff who deal with creditors daily.

 

An informal agreement is an arrangement that is entirely between you and your creditors. With the help of ChapterTwo’s negotiation process these arrangements are made mutually between the customer and the creditor. This enables ChapterTwo to negotiate settlements that do not effect your credit rating and can reduce your debts from anywhere between 40%-80%.

 

How can an informal arrangement help me?

An informal arrangement can help relieve debt in a number of circumstances. An informal arrangement can help you by freezing the interest on your accounts with your creditors and by negotiating a reduced full and final settlement without impacting your credit file.

This option is particularly useful if you are experiencing any changes to your current financial situation. For example if you:

– Have recently become unemployed
– Unable to work due to injury or illness
– Received a decrease in salary etc.

 

Our clients who have experienced a change in circumstances like these have found maintaining repayments of their debts can become very difficult. ChapterTwo would recommend an informal arrangement if your financial difficulties are only short-term, as we can set up with a short turnaround, and the agreement does not get recorded on the debtors credit file.

 

How does an informal arrangement work?

ChapterTwo implements informal arrangements in a unique way, helping the client from initial engagements. Our professional team contact our clients creditors and look to freeze the interest currently accruing on their accounts which gives the client much needed breathing space. ChapterTwo in partnership with Critique Private clients develop a cash-flow and budgeting plan that is implemented during this stay on their accounts.

 

Once a solution has been tailored to the individual, ChapterTwo will then informally negotiate a settlement on the client’s account saving them up to 80% of the original debt. As informal arrangements are not bound by legislation, ChapterTwo’s clients will avoid bankruptcy and defaults during this informal process.

 

Debt can be so difficult to manage as interest is continually amassing on your debt, digging you into a deeper hole if you are unable to meet your current payments. An informal arrangement makes it possible to offer your creditors a fair share of what you can afford to pay, and in many cases, any interest charges you may have will be temporarily frozen. This enables you to focus on repaying the principle debt.

 

How does the hardship process work?

ChapterTwo will contact your banks to arrange a Hardship period. A Hardship period allows the customer to be able to reassess their finances and get back on their feet. Hardship periods may freeze the interest on your accounts for up to 6 months, reduce or eliminate your minimum monthly payment and allow you some breathing space to assess your situation.

 

What is a full and final settlement?

A full and final settlement is what ChapterTwo can offer your creditors to allow you pay a lump sum as opposed to the full balance you owe on your debt. In return, ChapterTwo can organise for your creditor to write off the rest of the debt. Our trusted relationships with the banks allow us to offer this settlement to our clients who qualify.

 

People who qualify are those who are able to come up with some money or have savings available to use. Other ways to achieve a full and final settlement can be through refinancing your mortgage, which ChapterTwo can look to organise for you.

 

What kind of settlements can be achieved?

The level of settlement that can be achieved vary depending on the clients financial situation. Informal Settlements are based on how much the client has to offer to avoid formal Bankruptcy options like Part IX and Bankruptcy’s.

 

ChapterTwo aim to negotiate a 40 – 80% reduction based on your financial situation. ChapterTwo is able to do this by leveraging your creditors need to reduce their risk. If your creditors were to make you pay 100% when there is simply no way for you to be able to make those repayments then the decision is not commercial and both parties are affected. By using ChapterTwo, we are able to show your creditors with supporting evidence that you are willing to pay as much as you can and don’t want to default on your debt.

 

How to get out of debt?

ChapterTwo will provide easy-to-follow steps to help you get out of debt:

– Assess your assets, liabilities, income and expenses
– Contact your creditors on your behalf and negotiate a Hardship or ‘breathing space for up to 6 months’
– Partnered with Critique Private Clients – prepare a cash-flow and budgeting report to minimise your expenses and formulate an achievable budget
– Negotiate with your creditors to settle your debts at a reduced rate
– Plan your financial future debt free!

 

What is financial planning??

Financial planning is the process of meeting your life goals through proper management of your finances including a financial review. Life goals can include buying a home, saving for your children’s education or planning for retirement. It is a process that consists of specific steps that help you to take a big-picture look at where you are financially.

 

How to create wealth?

The right kind of financial advice can really make a big difference. Financial advice can give you confidence that your future plans are achievable. If you’re not on track to achieving your goals, it can help you put the right strategies in place, or come up with more realistic goals.

 

What you need is a life long financial plan. This tells you where you’re planning to go, where you are, and what needs to happen every year between now and the next milestone on the way.

 

How can personal budgeting help me?

Budgeting and planning your finances can help anyone who earns any income. Budgeting, with the help of a financial planner, will show you how to allocate your money and present you the choices on what you can actually enjoy within your financial boundaries.

 

ChapterTwo’s 5 benefits of budgeting:

 

    1. We keep you focused on your money goals. Most people spend more time planning their next holiday than planning for retirement or their savings. We will show you how to avoid unnecessary spending on items that don’t contribute to your financial goals.
    2. We show you how to organise your spending and savings. Once we plan where you’re headed, and how long it will take to get there, then we will look at your cash-flow and determine if you’re spending more money than what’s coming in. We divide your money into categories of expenditure and savings so it’s easy for you to make adjustments. This helps you organise your bills, receipts and financial statements.
    3. We prepare you for expected and unexpected costs. Part of a financial plan is looking at risk capacity: what is your risk of becoming disabled and being unable to support yourself or your family, or an unexpected passing and saddling your family with an un-manageable mortgage payment?
    4. We monitor what comes in, and what goes out. You will become more confident with your money. People with a financial plan feel much more comfortable about managing money, savings and investments. After ChapterTwo creates a plan for our clients, they feel in control of their finances, and feel a new sense of discipline.
    5. We will help you build wealth. Those with a financial plan generally have more money saved than those who don’t. This is your ultimate goal, and identifying the path to get you there is just the first step to the new chapter of your life.

 

Do I need a financial plan?

A financial plan can benefit people at all income levels. The sooner you start making smart decisions, the sooner you know where you want to go, and if you have a plan to get there, the more likely you are to attain it. 

 

Who should refinance their mortgage?

ChapterTwo assist people with mortgage refinance that are in many different financial situations. We provide solutions for refinancing or consolidating loans to people who:

– Have been previously bankrupt
– Looking to reduce financial stress
– Have an irregular income
– Are self employed
– Have an unfavorable credit history
– Those who have existing loans
– Pensioners
– Short-term employed

 

ChapterTwo also provides assistance to those who want to:

 

  • Increase cash-flow
  • Merge all payments into one
  • Pay off mortgage faster
  • Renovate house
  • Buy a new car
  • Change to a home loan which is tailored to you

 

How does refinancing mortgage work?

Put simply, it can be said that mortgage refinancing is exchanging your current mortgage plan for a new one. This is very beneficial to those wishing to pay out their current mortgage and any other debt they may have at the same time.

 

What if I am credit impaired or in debt?

This loan is designed to help those borrowers with bad credit or a poor credit history to purchase or refinance a home. If you fall into this category, or have had time off work, become bankrupt, or even have a Part 10 Debt Agreement, ChapterTwo may look to refinance your mortgage and consolidate your debts to minimise your repayments, settle debts and eventually clean up your credit rating.

 

ChapterTwo go above and beyond to find the right solution for all of our clients. We understand that everyone and their situations are unique, and are willing to assist those who have previously been denied by a bank or mortgage broker. Why don’t you give ChapterTwo a call and see what we can do to help you.

 

Consolidate debt through mortgage refinance

There is a number of ways to consolidate credit card and personal loan debt. An option for you to consider is doing this by refinancing your home loan. Often, ChapterTwo can offer a mortgage refinance that is at a lower rate of interest than your personal loans or credit cards.

 

When you establish your debts under your mortgage through ChapterTwo, we create a simple payment scheme, combining your debts into one easy payment at a potential lower rate than you are currently paying. Our expert mortgage brokers will help you evaluate your personal situation. When you are ready to apply, or even have more questions before taking the next step, you should speak with a ChapterTwo consultant and assess your options.