Can a Debt Agreement End Your Worries?
There\’s nothing worse than that aching feeling of worry that never leaves. It follows you around at the office, on your trip home, when you\’re out trying to have fun. That\’s the feeling of being over your head in debt and having no idea how you\’re going to get out.
To give people a way out of debt, the Federal Government created two main methods of escape – bankruptcy and debt agreements. For most people, you, your lenders and the Commonwealth Government, it\’s preferable that you enter a debt agreement rather than a bankruptcy if at all possible. So what is a debt agreement and how can it put an end to that dread you feel?
A debt agreement is a legally binding compromise between you and your lenders for repaying your debts. Your various payments are rolled into one, regular consolidated payment. The interest is then frozen and the debt is reduced to a lower, more affordable amount, which you can repay within 2 – 4 years. As long as your lenders get a better return than they would under a bankruptcy, they\’ll usually accept the debt agreement offer. Policies vary between lenders however, so it\’s worth talking to a debt administrator who can clarify whether your debts can be resolved this way.
The end result of your agreement is that you\’ll be debt free faster than otherwise possible. After your debt agreement has been approved, your lenders will also no longer be allowed to contact you. You\’ll make one regular repayment and as outlined, it will be based on what you can actually afford rather than what a debt collector might insist you pay.
So, is there a catch to doing a debt agreement? There are some conditions that apply for a period of time. The debt agreement is marked on the NPII and your credit file, which stops you from getting into more debt until the original debt is repaid. It will also be removed from your credit file after 7 years, so you\’ll be clear again when applying for credit cards, personal loans, home loans and other types of finance. It should also be noted that many 2nd tier lenders will lend to you once the debt is repaid (which often takes between 2 and 4 years) and you can refinance those debts with a major bank once the credit file notation has been removed. It\’s also important to note that if you\’re in debt distress, it can be difficult to get a lender to agree to a consolidation loan in the current climate.
So a debt agreement is definitely worth thinking about if you are having serious debt problems. Certainly don\’t ignore those problems and continue struggling. Just give some time to consider what a debt agreement can do for you and if it could be the answer to that stubborn worry that just won\’t go away.
Looking to find an established and reliable Debt Agreement partner? Then visit www.debt-agreement.net.au to find the best advice on gettingout of debt.
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