It is quite common for debtors to be asked to stop paying their creditors and to make pre-commission payments. Remember that there is no guarantee that your creditors will say yes to the proposed debt agreement, and if you stop paying, you may end up in a worse position. As a general rule, no reimbursement of the directors` fees paid is offered to them if the proposal is rejected. Debt agreements are a formal alternative to bankruptcy under bankruptcy law for people who are insolvent (unable to pay their debts when they are due). Under a debt agreement, your unsecured creditors agree to accept less than the total amount of debt owed, in return for a commitment on your part, to make regular repayments for an agreed period. As of June 27, 2019, debt agreements are limited to a maximum of 3 years or 5 years if you own or pay for your home. While these formal options can free you from debt, they will have serious long-term consequences. You could influence your career and your ability to get credit or loans in the future. A debt agreement is designed as an alternative to bankruptcy that can protect your wealth. As long as you keep pace with your asset repayments, such as your car and house loan, as well as your debt contract repayments, your wealth should be protected in general. A debt agreement includes only justifiable unsecured debts. While debt agreements continue to have negative financial repercussions; they may be a better alternative to filing for bankruptcy.
However, debt agreements are a solution that should only be considered in times of extreme indebtedness. Negotiators can help you close a debt agreement and settle your debts with creditors. Contact us today for a consultation or to arrange a counselling interview. Ted & Josie are married and have four children. Ted works as a storekeeper and earns $25,000 a year. Josie used to work as an administrator, but that job ended a few months ago. Since then, it has been impossible for Ted & Josie to keep pace with its credit repayments. Ted & Josie feel like they`re falling further and further behind and will never catch up.
Ted and Josie are considering going bankrupt. Then they see an ad that says, “You`re struggling to pay your debts – there`s a way to get out of business without going bankrupt! Call now. If you go bankrupt, you won`t have to pay most of the debts you owe. Collection companies stop contacting you. But it can severely hurt your chances of borrowing money in the future. When you enter into a debt agreement, you can make regular payments or lump sum payments in a way that suits you and your debts are often reduced to an agreed amount. In its simplest words, a debt agreement is a debt settlement agreement that is entered into between you and your creditors to settle your debts at an affordable price.