Entering a debt agreement can seem like a daunting task for many individuals riddled with debt.
It is important to recognise that the debt agreement pros and cons will vary depending on individual circumstances. Factors, such as the number of creditors and amounts owed on your debts, will shape the overall debt agreement pros and cons that are most applicable to your situation.
While debt agreement pros and cons should be explored with the assistance of a professional debt advisor, below are just a few of the typical debt agreement pros and cons individuals can rest assured will be applicable to their situation.
Debt Agreement Pros:
- Debt agreements can in some situations be more affordable than your regular creditor repayments;
- If your debt agreement is accepted by your creditors, they are unable to take or continue legal action against you;
- Once a debt agreement is successfully accepted by creditors and completed, the individual’s debts are effectively settled, providing a fresh start;
- Contributions to your debt repayments are tailored to your specific circumstances and therefore won’t dramatically change your standard of living;
- A debt agreement can provide a way to become completely free of unsecured debt, as any remaining unsecured debt is legally written off once it is completed;
- Based on a strict budget, some people find debt agreements help them control their money and spending habits, allowing some clients to save money while also repaying debts;
- All interest and charges associated to those unsecured debts will be frozen during the course of the debt agreement; and
- As opposed to bankruptcy and some other options to debt, you can keep your secured assets –provided that you are able to continue to pay for them.
Debt Agreement Cons:
- A default on your credit file will exist for up to 5 years; and
- A record of the debt agreement will be kept on the National Personal Insolvency Index for 5 years.
It can be highly beneficial to weigh up and evaluate debt agreement pros and cons with the help of an experienced professional debt advisor.At the Debt Agreement Advice Centre, our friendly and licensed debt agreement advisors can help you explore what alternatives may exist to assist you with your situation and debt repayments.
Contact the Debt Agreement Advice Centre today on 1800 653 485 or browse our website for more information.
