If you are looking for a debt solution but don’t want to go bankrupt, then a debt agreement may be the answer. Many people who have debt feel stressed and worry about how they will manage. When the debt gets too much to handle, then it is natural to start looking for solutions that do not involve bankruptcy or debt consolidation. A debt solution that does not force you into bankruptcy is a debt agreement. Thousands of Australians choose debt agreements each year as a way to manage their debt levels and reduce repayments.
A debt agreement is one where you and your unsecured creditors agree that you will pay back some or all of your debt over time, according to what you can afford. The beauty of this is that debt agreements are set at a manageable level and the debt doesn’t keep growing through interest.
Debt agreements requires some negotiation with your creditors so that your repayments are manageable. This is where we can help you. We negotiate with your unsecured creditors on your behalf. The purpose of the negotiation is to get you a better deal; one that you can afford. Most debt agreements last between 3 and 5 years and are protected by law so that you cannot be asked to pay back more than the agreement amount.
A debt agreement can be an attractive option for people who want to pay off their debts at an affordable rate, protect secured assets like home and car and not have their credit rating affected for more than a few years.
Jane has a regular job, rents her apartment and lives alone. She has a car loan for which she makes regular repayments and has a couple of credit cards that she uses to make personal purchases. Over time Jane finds that the amount owing on the credit cards grows, she sometimes only manages the monthly minimum repayment amounts and the interest is costing her more and more. Jane continues to make the loan repayments on her car but she is finding it harder to cope and there is mounting pressure when her hours of work are cut. Jane struggles on for a few more months but begins to find it difficult to pay her rent and everyday bills. Seeking a solution to her situation, Jane enters into a debt agreement with her creditors. The interest accruing on the credit card debt is frozen, the monthly repayment amounts are set at a level that she can afford and she agrees to pay back that amount over a period of years until the debt is paid.
To be eligible for a debt agreement you must meet certain criteria:
We help you draw up your debt agreement. It is vital that the debt agreement payments are realistic and take into account known issues such as fluctuations in income (overtime or reduced hours of work) and your financial circumstances.
We ask you for details of your debts, your income and your expenses. Then we propose a debt agreement to your creditors based on that information and based on what you can afford. We lodge the proposal with the relevant government department and your creditors get a chance to vote on the proposal.
Once your creditors have voted positively, the debt agreements comes into being. After that, you make regular payments to us and we distribute agreed amounts to your creditors for the life of the agreement.
If you are considering a debt agreement there are consequences of which you should be aware. We can provide you with detailed information as part of our service to you. A summary of the impacts are:
For more information on debt agreements and how they might help in your particular situation, contact us on the number at the top of this page or fill in the form for a Free Consultation.