Since it can have serious consequences if you apply for a debt contract, it is important to get the right advice before making decisions. A Part 9 debt contract is an offer (made by a debtor) to settle your debts as an alternative to bankruptcy. There is so much misinformation about debt agreements that it is time to set the record once and for all. A Part 9 debt contract gives you the option of having an affordable repayment on your unsecured debt. All debt agreements are affordable. A debt contract usually stays in your credit file for at least five years from the beginning of the contract. In some cases, this may take longer and affect your ability to get credit. Debt contracts are a formal alternative to bankruptcy under the Bankruptcy Act for insolvent individuals (unable to pay their debts when they mature). As part of a debt agreement, your unsecured creditors agree to accept less than the total amount of debts due in return for a commitment you made to make regular repayments for an agreed period.
As of June 27, 2019, debt contracts are limited to a maximum of 3 years or 5 years during which you own or pay your home. We offer debt agreements in Melbourne, Sydney, Brisbane, Perth and Adelaide. A debt contract is for people with lower incomes who cannot pay what they owe. But there are consequences. Although debt agreements still have negative financial consequences; they may be a better alternative to the declaration of insolvency. However, debt agreements are a solution that should only be considered in times of extreme debt. Debt negotiators can help you reach a debt agreement and pay off your debts to creditors. Contact us today for advice or to arrange a consultation. Rushika had to face repayments on 3 credit cards and a personal loan. She works, but she is a very young employee and never seems to be able to pay much more than interest on her credit cards. She came across an internet ad for a service called Beat Debt Solutions, which promised to stop the interest on their debts and wrap all her debt repayments in a simple payment. Creditors and collection companies can be relentless, which only increases the stress you already feel in the absence of a credit repayment.
If you sign up for your debt contract that will be repaid, you will be free of most of your unsecured debts, which is a toxic debt. Compare how this works if you continue to make payments on your credit cards. Like many people, you can only pay the minimum monthly refund on your credit cards. This way, you will find that it takes years to pay off your debts. Take a look at the moneysmart site (moneysmart.gov.au). It shows how $1,000 on your credit card can be converted into an 11-year loan because the amount you need flows slowly and you pay a large amount of interest.