The average rate of return for unsecured lenders within all bankrupt estates has risen up from 7.07 cents to 8.42 cents for the dollar lent in the year 2013-14. The share of personal bankruptcy agreements that paid a dividend decreased from 62.4 % to 60.6%, in the past two years. In such an economic scenario, if you are willing to propose and enter into a debt agreement, there are various significant consequences that you as a debtor should be aware of. Any debt agreement is a measure of clearing all the debts when you are unable to pay off the debt owing to some sort of genuine difficulty. In case you commit some kind of bankruptcy, your creditor shall take charge of this issue and appeal to the honourable court for repayment of all the debts. All these hassles are together known as debt agreement consequences, which need to be discussed in detail.
Outcome of a debt agreement
You are advised to know the debt agreement consequences before entering into any kind of agreement. In most cases, this kind of agreement is recorded in a borrower’s file for 7 years. This record comes in handy for lenders whenever you seek for mortgages, credit cards, personal loans and store financing. Though there is a notable difference observed among different creditors while checking these notations, yet you are probably going to experience the following common debt agreement consequences:
Ø While paying debt agreement, which normally lasts for 2 to 4 years, you will be hardly able to borrow any sum, including personal loans, credit cards as well as any means of unsecured debts.
Ø After repaying the entire amount, the credit history will be updated in your favour. After 7 years of the acceptance of debt agreement, the history will be removed from the credit file.
Ø It will be pointed permanently on an index called National Personal Insolvency Index, which is a paid service for companies as well as individuals for reviewing.
Ø However, this index is not opted by the banks or other financial institutions for lending home loans, credit cards, personal loans and other means of general consumer borrowing.
Insides of a debt agreement
When you find out about debt agreements, you will see that the amount of your repayments based on the unsecured debts is further negotiated to make it affordable for you. But that surely requires the affirmation of your creditors. And in order to help you in such a scenario, you will definitely require the assistance of an adept debt agreement administrator. He will be able to evaluate your income and expenses thoroughly before determining a repayment amount that is both acceptable to you as well as your lender. Then it is presented to the creditors for a formal vote which determines the fate of the new proposal. But there is no reason to panic as most of the benevolent creditors tend to accept a rational offer when you are truly in a hardship. As soon as the new debt agreement is accepted, you are liable to pay a single regular repayment to the debt administrator you have hired, who in turn repays to all your creditors as consequences of a debt agreement. For more details, just visit HTTPS://WWW.DEBTMEDIATORS.COM.AU/PERSONAL-DEBT-SOLUTIONS/DEBT-AGREEMENTS/