Anyone can find themselves into huge debts. While some people get into situations like this simply because they got a little irresponsible spending cash, others are forced by circumstances beyond their control like illness or divorce. As soon as one realizes creditors are on their neck, it does not help to run away but rather look for ways out of the ugly scenario. One method employed by debtors to offset their debts over time is reaching debt agreements.
Debt agreements are far much better than bankruptcy. It is a better option that debtors can go for when in need of a way out of unmanageable debts. As soon as a debtor completes all obligations and payments under the agreement, they are released from these debts and set free.
Not everyone qualifies for debt agreements, however, since there is set criteria. These are…
- A debtor should have no bankruptcy cases over the last ten years.
- Should not be earning approximately more than $1560 each week after tax.
- Should not be in possession of assets totaling $108,162.
- Should not have debts that are unsecured totaling $108,162.
A debtor preparing an agreement offer has to be realistic. In fact, it is important to seek debt agreement help to be safe. An individual needs to assess their current situation and future expectations to come up with agreement.
- Creditors will readily accept.
- That is affordable to them.
- That states what happens in case circumstances change in the future.
Debt agreements often offer debtors protection that informal or private arrangements may not offer. At the same time, there are eligibility requirements which must be met before making proceedings. Lastly, when there are several creditors, all of them must receive the same amount of payment.
Debtors need help with debt agreements to prepare a proposal that is acceptable and takes into account the amount of money a debtor can afford to give creditors each month. They are also able to assist with filling the correct forms including:
- Debt Agreement Proposal – This form identifies the debtor, outlining the offer in dollar terms.
- Explanatory Statement – This gives creditors information about a debtors income, expenditure, personal circumstances, assets, debts, household expenses and why the person is experiencing financial difficulty.
- Statement of Affairs – This form gives detailed account of sources of income, reasons for inability to pay for debts and assets.
Once the debt agreement proposal is complete, it has to be sent to the Official Receiver within 14 days from the day it was signed by the debtor. The form has to be accompanied by a debt agreement lodgment fee.
The debt proposal has lots of legal issues and that is why a debtor needs help. Find out what Debt Mediators Debt Agreements offer clients at the moment to reach a debt agreement with creditors. This way, one can easily win the confidence of creditors who will in turn vote to accept the agreement.
It is important to note that when an individual signs a debt agreement, they are unable to access lending for a period of 7 years since the agreement is noted on the credit file. It therefore pays to be financially responsible.