Though they can be used by both businesses and individuals, debt agreements are primarily aimed at consumer debtors to curb extensive debt and avoid bankruptcy. Debt agreements, like most other monetary solutions, can take on a number of different forms depending on the individual’s needs.
The first step of a debt agreement is always to make a proposal to your creditors – this generally involves outlining a longer repayment plan for your various debts, and may occasionally involve the debtor paying less than the entire amount due. Interest charges become null under debt agreements. Debt agreements differ from other debt solutions in that all creditors must agree to the agreement proposal, and they are much more final than informal debt arrangements. Each individual’s debt agreement will differ, depending on the amount of debt they are in, the number of creditors they owe to, and the nature of the agreement.
To be eligible for a debt agreement, individuals must not have previously been bankrupt, undergone a debt agreement within the past decade, and must meet a number of income and debt-based requirements.
Federal Attorney General Nicola Roxon recently released a statement outlining the positives of debt agreements, saying: “Debt agreements in many cases can be the smarter way forward especially as bankruptcy can leave a financial legacy that can affect people for years.”
According to the Insolvency and Trustee Service, there have been over 150,000 bankruptcies since Jan 1, 2007. Choosing a debt agreement before it’s too late could be your best option.
lifeafterdebt.com.au offers a number of different debt solutions, including debt agreements. With experienced financial advisors and extensive knowledge under their belts, AFS are ready, willing and able to help you become debt free today. Contact us now on 1300 237 669 or take a look at our website today for more information, or to book a consultation.