Credit cards and personal loans can be expensive ways to finance everyday living costs, but are difficult to avoid for most households. Major purchases can require some type of financing that put individuals into debt, and financial emergencies can come in a variety of forms at any time. Each of these common occurrences make managing money on an already tight budget a challenge. Living with debt can be a stressful experience when monthly payments have become too much of a strain on your income or if you have started to miss payments consistently. For those struggling with high interest credit card or personal loan debt, a debt agreement can provide a path to live beyond debt.

Debt agreements

A debt agreement is a formal arrangement established between you and your creditors that is meant to help you settle your outstanding debts in an affordable way. Entering into a debt agreement with creditors allows individuals and families a way to avoid the negative consequences of bankruptcy and work toward repayment of debts within a reasonable time frame. Debt agreements are offered to individuals who hold multiple debts like credit cards, personal loans, medical bills or merchant account debts that are unsecured and the debtor must be deemed insolvent to utilise a debt agreement.

Living beyond debt

There are specific benefits debt agreements provide to debtors that allow them to live beyond debt. First, you will only pay an agreed upon, fixed amount toward your debt that is manageable within your monthly budget. Creditors are also required to freeze the interest and any other charges assessed on your account each month while you are working on repayment. Once a debt agreement has been agreed upon between you and each of your creditors, no new legal action can be taken by your creditors in an effort to collect the debt. Additionally, all of your debt that is listed on a debt agreement is rolled into a single debt, creating one single payment toward the debts each month instead of multiple payments. In some cases, creditors will write off a substantial portion of your outstanding debt when accepting your debt agreement, making your total amount to be repaid over a shorter period of time.

Entering into a debt agreement can be a viable way to begin your life beyond debt with a sound mind. Individuals who completed debt agreements reported that they immediately felt more comfortable with their monthly repayments and experienced less stress as the calls from creditors subsided. Once the debt agreement is complete, individuals are able to start over and live a life beyond debt without the harsh consequences of bankruptcy.