Avoid Bankruptcy with Part 9 Debt Agreements

Entering into a formal debt agreement can be one of the most effective ways for most people to deal with debt that is unmanageable. However, before entering into these kinds of agreements, it is very important to understand how they work so that you can manage your expectations and also ensure that it goes as planned. Part 9 Debt Agreements or the Part IX Debt agreement is generally a binding contract between the debtor and the creditors.

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The Part 9 Debt Agreements allows the debtors to offer creditors a reduced settlement proposal which will be based on the payments that they are able to afford. There is a very strict criteria for qualification that is generally set for the Part 9 Debt agreement and it only applies for debt that is unsecured. These include debts such as credit card bills, utilities and telephone bills. Check out Debt Mediators.

If the Debt Agreement proposal is accepted by the creditors, then your debts ill no longer incur any additional interest. The new repayments regime will be set over a certain period of time which can be up to 5 years. During the duration of the Part 9 Debt Agreements between you and your creditors you will be protected from some of the more aggressive creditors. You will not have to grapple with debt collectors or law suits by creditors that are party to the debt agreement.

Entering into Part 9 Debt Agreements will, however, come with certain consequences for you. Proposing the debt agreements is almost like filing for bankruptcy. If they reject your agreement proposal, they can subsequently use the information that you provide to force you into declaring bankruptcy. Because these formal agreements are recorded by the government, there will be a permanent record of your name in the Government’s National Personal Insolvency Index. This will also be listed on your credit file for a duration of 5 years. These are the same consequences that generally occur when you declare bankruptcy and may sometimes hinder your access to credit or mortgages. When entering into these formal agreements under Part 9, you therefore need to fully understand the consequences and also appoint an administrator that can competently assist you to go through this process.

Debt agreements offer a great alternative when you are faced with a financial crisis and your consumer debt is spiraling out of control. Rather than tarnish your negative credit reporting file, Part 9 Agreements offer you a perfect solution that eliminates much of the headache that comes with debt that is unmanageable. Some of the benefits include the following:

·         Have a convenient and single payment rather than multiple payments

·         Stop interest on your debt from accruing

·         Stop legal actions and creditor harassments

·         Lessen the pressure of dealing with creditors by appointing an administrator to deal with them on your behalf.

·         Eliminate your unsecured loan obligations without having to file for bankruptcy

·         Limit the extent of damage done to your negative credit reporting file.

If you qualify or wish to know whether you qualify for Part 9, it is advisable to appoint a debt specialist and Part 9 administrator to assist you with the process so that you can eliminate the headache of managing debt. Read more at http://www.debtmediators.com.au/bad-credit-loans/.

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