What is debt management?

It is a strategy to assist you in managing your debts correctly. We look at the difference between ‘deductible debt’ and ‘non-deductible debt’, and our advice could involve the restructuring of loans, consolidating of debt and paying off certain debts faster, where appropriate.

What is the difference between Deductible and Non-Deductible Debt?

To determine whether a debt is deductible or not depends on its use;

• Non-deductible debt is where money is used to purchase an item for personal use. For example, using credit card debt to buy clothes, or taking out a home loan to purchase the home you intend to live in.
• Deductible debt, on the other hand, is used to purchase an income-producing asset; for example, property that is rented out or dividend paying shares.

Debt Management Process

Our process helps you to prioritise your debts more effectively and looks at ways to repay non-deductible debts faster or make correct use of deductible debt. In many cases even the deductible debt may not be appropriate for a person, especially if the amount of debt being used is too much or the risk of the investment falling in value is high.

• We show you how debt repayments affect your cash flow, and what would happen if interest rates were to rise.
• We demonstrate the effect of an investment loan (known as gearing), factoring in investment earnings and tax implications, helping you understand ‘positive’ and ‘negative’ gearing and whether these are correct strategies for your situation.
• Lastly, we advise you on risk provisions you need so that you are protected from financial loss. Insuring your ability to repay a loan is a very important part of any debt management strategy.

Our process

We consult with you, determining your goals and objectives and then implement a suitable strategy. Reviewing your plan is important. Debt management services is a critical part of any financial planning advice.

Call us on (08) 9256 3788 to book your consultation.
Alternatively you can Contact Us and we’ll be in touch to set an appointment that is convenient to you.