A Debt Agreement is a legally binding agreement
with your creditors. Usually you pay an agreed monthly sum
for a period of 3 to 5 years and the interest on your debts
is frozen. In many cases the money you have to repay using
debt agreement will be less than the total amount you owed
before the debt agreement.
Debt agreement will
protect you against legal action by your creditors.
Your monthly payment will depend on your income and liabilities.
You can not use debt agreement process if:
a) you have been bankrupt or had a previous debt agreement
in the last 10 years.
b) your assets exceed $75,075
c) your income for the next 12 months is expected to exceed
$75,481 (before tax).
d) your unsecured debts exceed $75,075
If you have property, you will not usually have to sell
your property when entering into debt agreement Your house
mortgage is not included in your Debt Agreement. Of course,
you would have to continue paying your mortgage payments.
Your Debt Agreement proposal will be recorded on the National
Personal Insolvency Index register. Your name will also
be recorded on a commercial credit reference database
for 7 years, after which time it will be deleted.
On the other hand, debt consolidation is a simple
merging of your existing loans and credit cards into a
single loan. This is a personal loan and the interest
rates are often reduced.
