Bankruptcy can be a daunting process and it is often a preference to avoid it if possible. Another option is to enter a debt agreement with your creditors. Legislation is located in Part 9 of the Bankruptcy Act; hence it is commonly referred to as a Part 9 Agreement. It is basically a consolidation of the repayments made on unsecured debt into an agreed upon amount that must be paid back over a specified period. This amount may be less than or equal to the value of your total debt depending on the negotiated agreement and is normally paid over an extended period of time.
The advantages of a debt agreement can take most of the stress out of your financial situation. Your creditors can no longer contact you, however all communication must be done through your chosen debt agreement administrator. Not only are they more qualified to negotiate with creditors, this takes out the stress involved for you. The debt agreement administrator you appoint will negotiate an amount to be paid as well as a time period you will have to pay it back. This often results in a smaller total debt that you will have longer to pay off.
Similar to bankruptcy, once you have organised a debt agreement, this will appear on your credit record for 7 years. This will make further borrowing prospects very unlikely throughout this period. It is important to realise that situations such as bankruptcy or considering debt agreements should be last resorts to finalising your debts. It is the option you take when this is the only way you can pay back your debts. Please talk to us about the benefits and consequences of a debt agreement so that you can decide if it’s right to you.
This procedure should not be undertaken alone. There are professional mediators that can help you through the debt agreement process to ensure you achieve the best result possible. Specialist teams will negotiate a favourable deal for you and your creditors that will ensure that everyone involved is satisfied. They will administer the agreement as well as further negotiations, leaving you free from communication with your creditors. It is highly recommended that you consult with such professionals before considering your options as they will be able to suggest the most favourable course of action to finalise your debts.
Whether you enter a debt agreement or go bankrupt, the process can obviously be quite stressful. However it is the first step to becoming debt free and enjoying the freedom of the debt free lifestyle.
It is worth taking advice on the options that are available to you. Whether you think that a debt agreement or bankruptcy will be the right solution for you, or simply need to talk to someone about your options, call Debt Agreement Solutions on 1300 653 962. Let Debt Agreement Solutions help you get your life back on track.