This type of agreement is a very serious undertaking that should not be entered into lightly, which can affect your ability to get credit and will be a matter of public record. It can be beneficial to all concerned, as it may allow you to pay what you can generally afford, while your creditors may receive more than they would if they forced you into bankruptcy. It can offer a flexible way to make an arrangement to clear debts, where you negotiate to pay a percentage of what you owe over an agreed period of time. Payments are made to an administrator, as opposed to directly to your creditors, with your obligations to repay monies, finished at the end of the agreement, even if you have not paid everything that was previously owed at the beginning.
Is it My Best Option?
When in serious financial difficulties, rushing into a part 9 debt agreement or any other is not a wise move. Your first point of call should be to discuss openly and honestly your exact financial position with professional financial counsellors who are available nationwide. You can also obtain part 9 debt agreement advice from Debt Fix or other commercial companies who may suggest alternative options for you to deal with your unmanageable debt.You should understand that while the part 9 agreement can help some, it may not be suitable for certain situations.
Debt Agreement Benefits
A debt agreement is normally set over a period of three to five years, with your contributions based upon your genuine ability to pay and will be legally binding upon most of your unsecured creditors. The sum to be paid is fixed, with interest and charges frozen, so the amount owed will not continue to accumulate. If you stick to the terms of the agreement, creditors can’t harass you, or pursue any further legal action, providing you with substantial peace of mind. Once the term under the agreement has finished, if all agreed payments were made, your debts are effectively settled.
Benefits for the Creditor
If you are in genuine financial hardship, it is highly likely that your creditors will accept an agreement where they will see at least some of the money, or at least more than if they forced you into bankruptcy. All creditors will receive the same percentage as everyone else, so there is no preferred status, and if the majority of creditors agree to the proposal, everyone gets paid.
Debt Agreement Consequences
When you enter into a debt agreement there are consequences, though some of the rumours of what it does and doesn’t entail are totally false. While your agreement will be a matter of public record for a number of years, and you will find it extremely difficult to obtain any credit during the repayment period, suggestions that you cannot travel overseas are unfounded. You are still allowed to run a business and be a company director, though you may have to inform those who deal with your company about your part 9 agreement.
In conclusion, being in debt is something that many Australians are dealing with, so you are not alone. There is a great deal of quality advice available to you, which will tell you the facts, rather than the rumours, and help you find the right course of action to remedy your debt problems once and for all.