A Debt Agreement is an arrangement designed for people who are struggling with their unsecured debt and in need of a solution, but who don’t necessarily have to go Bankrupt. Before Debt Agreements came into being, you either had to pay your debts in full or not at all. And so regardless of the amount of their debt or their ability to pay, people were forced to experience all of the negative consequences of Bankruptcy.
With a Debt Agreement, however, you actually pay back a percentage of your debt. The interest is frozen and all collection activity has to stop, but it is a good option for your creditors as well as for you because it ensures that they are all getting an equally proportionate amount of the money that you pay into it. And because you are making payments toward your debts you are not subject to a lot of the heavy restrictions that come with Bankruptcy, such as needing permission to travel overseas, compulsory income contributions based on the amount that you earn, and the sale of any assets that have equity available in them.
To have a Debt Agreement accepted by your creditors you generally have to pay more into it than what would be demanded of you if you declared Bankruptcy, because otherwise it is not the best option for them. Some people might wonder, then, why someone would need a Debt Agreement when they could just go bankrupt and pay back a lot less, if anything at all. A Debt Agreement is, quite simply, a better option for those who stand to lose too much by declaring Bankruptcy.
If you are unable to pay your debts but are worried about the effects of Bankruptcy, call us and see if a Debt Agreement might not be a better solution for you. Here at the Debt Agreement Advice Centre we have many years of experience in helping people with both Debt Agreements and Bankruptcies, and can give you impartial advice about the pros and cons of both solutions and how they might affect you personally. And if you have been told that you are unable to do a Debt Agreement because you have too much debt and/or income, we can still help you – there is a similar arrangement available to people who exceed the allowable amounts for a Debt Agreement which is known as a Personal Insolvency Agreement, and we are fully licensed and qualified to offer that too. Call us today on 1800 653 485.
