Are you thinking about changing an existing debt agreement? You should find this article useful if you have entered into a debt agreement and are finding it difficult to meet the payments. Can you change the payment amounts? Alternatively you may want to pay larger periodic payments than are set out in the agreement, so you can get rid of the debt faster. How do you do that?
A debt agreement normally ends when you have made all the payments, as per the terms of the agreement. Your name goes onto the National Personal Insolvency Index (NPII) when you enter into the agreement and the NPII will be updated when the agreement ends.
It is possible to change or terminate your debt agreement, should the circumstances call for it.
You will need to make a formal proposal for this to happen and your creditors are given the opportunity to vote on the variation – like they did when the agreement was first set up. If your creditors do not agree with your proposal to vary or terminate, the terms of the original agreement will remain.
Once a debt agreement is in place, unsecured creditors are bound by the agreement and can’t take further action against you. You are released from your unsecured debts when you complete the payments as set out in the debt agreement.
If you do not or cannot make the payments which are set out in the agreement, you or your creditors can apply to court for the agreement to be terminated.
If a debt agreement is terminated and the debts are not settled, your creditors can recommence recovery action against you. It is also possible for your creditors to seek to make you bankrupt.
The debt agreement will be automatically terminated if you become bankrupt.
Remember that when you enter into a debt agreement, there will be a recording on the NPII and it will stay there forever. Your ability to get credit in the future could be affected.
There are some shonky companies out there who will tell you that they can repair your credit rating. Beware! You can’t change the recording of your debt agreement on the NPII.
Getting help from a reputable debt administrator is advisable. If a debt administrator set up your original debt agreement, and you were happy with the service, it is wise to speak to them before you take steps to vary or terminate your existing agreement. A reputable debt administrator can give you advice on the advantages and pitfalls of your options, particular to your circumstances.
Debt Agreement Solutions provide advice and assistance to people struggling with debt. They can assess your situation and provide you with options that will suit your circumstances, and they can manage the process for you. Go to the website or call Debt Agreement Solutions on 1300 653 962.