Debt Agreement

Debt Agreement

Some people are in a significant financial trouble and a standard debt consolidation is not a possibility. In this case a debt agreement may be an option to consider.

What is debt agreement?
This is a process whereby a skilled debt agreement consultant renegotiates all your unsecured loans with your creditors into one single loan with a new affordable payment plan.

The following types of loans and debts may be consolidated: credit cards, store cards, personal loans, overdrawn bank accounts, electricity bills, telephone bills, cable tv bills, school and childcare fees, including repossessed cars, machinery, equipment and more.

The debt agreement process is regulated by government and the debtor (you) is protected by government legislation. Once you enter into a debt agreement you will start paying only one single weekly or fortnightly payment which will cover all your old loans. At the same time you are protected from any legal actions the creditors may have taken against you, which will allow you some peace of mind.

Another important point is that the interest owing on your old debts are removed and there is no interest charged on your new consolidated loan either.

To be able to enter into a debt agreement you must fulfill certain criteria:
- your weekly net income must be less than $1,186
- your assets must be less than $82,500
- your total unsecured debts must be less than $82,500
- you cannot be bankrupt ar have a debt agreement in the previous 10 years.

A record of your debt agreement will appear on your credit file report for 7 years. However, if you are able to increase your repayments or you are able to pay out your debt in full, you could finalise your debt agreement earlier.
Generally, to qualify for a debt agreement your total unsecured debts should be more than $8,000.

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