Australia Personal Finance Presents Vulnerable Household Debt Levels
The level of household debts in Australia is among those that may be unsustainable according to the global leverage report of McKinsey Global Institute, as discussed in Business Insider Australia.
According to the institute’s report, patterns of urbanisation can contribute to the levels of household debts. Countries that have a single megacity, or a few huge urban clusters instead of several large cities, possess higher prices for real estate in the megacity which translates to higher household debt levels.
The correlation should equate to higher sustainable debt in Australia, but other factors that indicate indebtedness combine to an overall state of vulnerability for the country. Along with Thailand, Malaysia, Sweden, Canada, South Korea, and the Netherlands, Australia appears to be the most vulnerable when it comes to household debt levels.
While the respective governments are trying to figure out how to resolve this as a whole, the elimination of debt rests primarily on individuals. Each should pay more attention to their personal finance and act accordingly towards debt recovery.
The process of debt recovery or credit management is dependent on both the creditor and the debtor. When debt recovery is successful, it can contribute towards driving the nation’s household debt to more sustainable levels. Finance companies, such as Biz 1, provide strategies and solutions for creditors to utilise towards successful debt collection.
One of the ways by which a creditor can recover money from the debtor is via litigation. It doesn’t necessarily involve lawsuits, but there should at least be the involvement of a legal intervention to help speed up the debt recovery process, be it a result of overwhelming bad credit loans or other cases.
Resolving disputes may also be done through arbitration. This serves as an alternative to litigation that may offer certain advantages. It works on participation and compromise, instead of the adversarial nature of litigation and this helps in avoiding hostile feelings between the involved parties. Of course, there are cons too such as limited objectivity and transparency.
Debt recovery will go more smoothly if the right methods and devices are used in resolving the disputes. Be sure to consult closely with a financial advisor on how best to proceed.
(Source: Why Australian household debt levels may be unsustainable, Business Insider Australia, Feb. 15, 2015)