debt agreement

Debt Agreement


- Are your credit cards over the limit?

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Stop debt collector calls and cut your debts
by 20% to 50%

- Do you have defaults on your credit file?
- Do you have difficulties paying your loans & bills?
- Do you receive phone calls from debt collectors?

A debt agreement can solve your financial problems


Of the various choices currently available to those who are struggling against overwhelming, unsecured debts, the debt settlement program offers a positive alternative to the most drastic response, bankruptcy. While credit ratings are still affected for at least 7 years, the damage is less than if a full bankruptcy had been declared. This step should be taken only if a simple debt consolidation is not possible.

This increasingly popular program is designed to assist low income residents who are insolvent and thus unable to repay their unsecured loans. It is necessary to meet both income and outstanding loans guidelines to qualify. The applicant must also have not used this debt management program or been in bankruptcy within the previous 10 years.

By negotiating a reasonable compromise with creditors, the debtor who qualifies for this plan will be committing to repaying at the most 75% of the outstanding loans and bills. However, all late charges and additional fees will be immediately frozen. Also, the weekly one payment will be assigned based on income and other financial responsibility which means it will be much more manageable for the debtor.

The first step involves having a trained financial counsellor, a debt agreement administrator, or a private trustee file the necessary paperwork with ITSA (Insolvency and Trustee Service Australia). The debtor will need to disclose all assets and loans at this time. The trustee will become the negotiator who works with creditors. A simple majority of creditors must agree to the terms of the new financial arrangement. They will then work directly with the trustee and no longer be allowed to harass the debtor.

This debt agreement program, which is similar to the personal insolvency program, is becoming more and more popular in Australia because it involves lower approval levels and overall less operating costs for the person who is already struggling with unmanageable loans. Making one weekly payment to the trustee becomes much simpler than trying to make multiple, more costly repayments to individual creditors. For an opportunity to regain one’s financial freedom, this government-sanctioned debt recovery program is definitely a positive alternative to the much more severe consequences of bankruptcy.

   
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