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 downside to doing a debt agreement? Yes in the sense that some restrictions apply for a period of time. The Debt Agreement does get noted on your credit file and the NPII, so you will have trouble getting into further debt at least until you’ve paid off what you owe. It will be removed from your credit file after 7 years after which it won’t affect you in securing home loans, car loans, personal loans, credit cards and the like. In fact, many people do borrow again once they’ve paid off the debt (usually within 2-4 years) from 2nd tier lenders and then refinance those debts with a major bank once the credit file notation is removed. In the meantime, the debt collectors will be off your back and you’ll be able to borrow again. Also, people sometimes don’t realise that if they have large debts and are currently struggling, they may find it hard to get a personal loan to consolidate their debts as the banks will often view them as an excessive risk.
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.
Want to find out more about Debt Agreements, then visit Graham McDermott’s site on breaking out of debt.
Related posts:
- About Writing Off Debt With An Unenforceable Credit Agreement
- Get Back On Track Without The Stress
- Be Free With Remortgages And Secured Loans For Debt Consolidation
- Pay A Lawyer To Free Your Worries
- Simple Steps That Can Reduce Your Everyday Stress
- Let Debt Consolidation Loans Free You From Debt
- Debt Consolidators- Free Related Resource For Consolidation Debt Loan
- Here Is An Answer For Making Your Life Free Even If You Are In Between Individual Voluntary Arrangement.
- Want A Free Vehicle, Etc?. Then Apply For Consolidation Loans.
- Escalating Debt Results In Escalating Stress Levels