Four ways a debt agreement can help you take control of your finances
No one ever plans to have financial problems, but if you find yourself in a situation where you can’t pay your debts, just know that you’re not alone. According to AFSA, thousands of people across Australia enter into debt agreements or file for bankruptcy every year.
If you have unsecured debts of $8,000 or more and you're struggling to make repayments, a debt agreement may be the right solution to help you take control of your finances. Here's how it works:
- With a debt agreement, you only make one affordable payment to your debt agreement administrator, rather than individual payments to multiple creditors. Your debt administrator will then pay your creditors on your behalf.
- Your debt administrator negotiates to pay your creditors a specific amount over a certain period of time. This time period is generally 3 to 5 years. How much you pay your creditors is determined by how much you can reasonably afford to pay. The amount determined also has to be agreed upon by your creditors. By having a plan in place to pay your creditors over a time period and at a determined amount, and by making your payments on time again, you'll gain back control of your financial situation.
- During a debt agreement, your debts are frozen. Rather than interest continuing to add to your unsecured account balances, your creditors can no longer charge interest or additional fees. This means you have the ability to put payments towards your debt balance rather than interest and fees.
- Once a debt agreement has been entered into, you uphold the terms and once the payment period has past (usually 3 to 5 years), any remaining balances on your unsecured debt are released and you no longer have to pay them.
Debts that can be included in an agreement may include old utility or telco bills, personal loans, store card or credit card debts, medical fees, taxes, Centrelink debts and more. While you will still have to pay your mortgage and other secured debts, a debt agreement may free up more cash flow so that you can more easily pay for these obligations.
Here's what financial freedom looks like...
- More money in your pocket each week
- Ongoing interest stopped
- No more hassles with creditors or debt collectors
- Only one affordable payment, suited to your budget
To find out if a debt agreement is a good way to help you gain back control of your finances, enquire about our debt management services today. Our experts can explain the process and help you determine if a debt agreement meets your needs. You can also explore other ways in which you can gain back control of your finances.
Safe Debt Management has been helping people get back on the road to financial freedom for years. For expert advice, call 1300 661 901 or enquire now!