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What You Should Know About Part 9 Debt Agreement

There are many people who are having a hard time to pay off their debts. There are even those who end up filing for bankruptcy. Still, there are other methods to improve one’s financial situation. Debt management companies offer debt consolidation loans based on their client’s needs and circumstances.

Most of the time, people are being harassed by creditors when they’re demanding payments for credit card debt and other personal loans. If you are among those who are in this situation, debt agreement is the best option you have. It is best to seek the help of financial experts so that you will fully understand debt agreement and all of the policies behind it.

Here’s what you should know:

What is a Debt Agreement?

Debt management companies will be able to help you in applying for a part 9 debt agreement but it is also important to know what the agreement is all about. A debt agreement serves as an alternative to bankruptcy and it is an option for dealing with unmanageable debts. These agreements are aimed at making payments more structured and affordable. The agreement becomes a legal binding agreement between the debtor and the creditor once it is accepted. However, there are certain eligibility criteria to be met in order to apply for these. Make sure that your debt management company explains all of the criteria before you apply. If possible, get a copy of the agreement so that you can go through the document in detail.

Debt Agreement Eligibility Criteria and Benefits

In order to quality, you must not be a party to an act of bankruptcy for the last ten years. Your after tax income limit should also not be lesser than the required threshold limit and you should have no unsecured obligations lesser than the prescribed threshold limit. Lastly, you should not be insolvent.

There are plenty of benefits of choosing a part 9 debt agreement. You will be able to put an end to legal action and recovery processes from your creditors and avoid bankruptcy. Debt management companies will be able to provide an easy and affordable payment plan based on your financial condition and the agreement will allow the freezing of interest. Debt agreements also have certain consequences which you need to be aware of. Therefore, it is also important to know how the agreement will affect you.

Things to Do Before Choosing a Debt Agreement

Debt agreement is a great alternative to bankruptcy solutions. However, the agreement may not work for all types of financial situations. Here are some important things you should be doing before applying for a debt agreement. Make sure that you evaluate all of your options before you apply for a debt agreement. There are various debt consolidation loans that you can seek, but compare the two to see whether proposing an agreement will work better compared to debt consolidation loans. Speak to your creditors and try to work a payment arrangement. Sell un-used valuable assets and offer it to your creditors to settle outstanding debts. Speak to experienced and registered financial counsellors for viable solutions and options.