If mounting debt is a problem that is growing exponentially and creditors are starting to take legal action against you then a debt agreement might be the best option to settle your debts. In this agreement, all current and pending legal action that is being taken to recover debts are suspended as soon as the proposal for a debt agreement is lodged and acceptance is processed by the AFSA. All legal action will be cancelled once the agreement is accepted by the creditors. The negotiation will take place between official administrators so you will not have to do it yourself and so you can rest assured that you will get the best result. The snowball effect of pending debt will stop when the legal action stops.
Debt Agreements
This type of agreement allows you to keep the secured debt such as the loans on your car and house so you can keep up appearances and the standard of living you are used to. As long as you keep making the payments on time then you will not have to go through the cost and hassle of changing your vehicle and home. Your family life can stay relatively the same and your family’s budget will become much easier to manage because of deft relief.
Debt agreements are an excellent alternative to bankruptcy. There are less restrictions put in place on you and your finances with this option. Under this agreement, you will still be able to leave the country so you will not have to cancel plans to visit family abroad or do business out of the country. A bankruptcy can be devastating to your credit rating and a debt agreement will have less of an effect on your credit history so it will be easier to recover your credit rating. The creditors must come to an agreement about the payments of the debt and this will be more positive to future lenders instead of bankruptcy.
In the agreement, to pay back the lenders, the administrator will base your payments upon what you can pay, not what the lenders would want to have, so you are able to afford the payments and not go further in debt. The flexible payment plan will allow you to keep paying your car loan, mortgage and any other secured loans. The regular single payments will replace the many payments and it will be based on what you can afford so that you can begin to get out of debt and make plans for the future.