If you are bankrupt, you will not have to pay most of the debt you owe. Collection companies stop contacting you. But this can greatly affect your chances of borrowing money in the future. Before you compete or consider a debt contract, you should explore your other options for managing uncontrollable debt. When your debt contract is concluded, your unsecured debts will be frozen. This means that when the debt contract comes into effect, no interest or fees can be collected on your unsecured debts. This allows you to pay off your debts over a fixed period of up to 3 or 5 years, through weekly repayments depending on accessibility. After successfully concluding the terms of the debt agreement, you will be released from any unsecured debt included in the agreement. If your creditors accept your debt contract proposal, you will know exactly how much you must pay each week or fourteen days or a month for the duration of your agreement. This allows you to budget and plan your finances. You also do not pay interest on your debt agreement as soon as it has been accepted by the creditor and there are no late fees or penalties. Sometimes the person who promotes the debt contract is not a debtor, but another person who acts as a broker. This person usually receives a fee from you or some of what you pay to the administrator of the debtor agreement.
Be especially careful with these people as they are not regulated by AFSA. It is an agreement between you and your creditors, that is to say to whom you owe money. This debt must be included in your debt contract. However, the surety is not released from the debt, and if you stop paying the creditor, it is likely that he will sue the person under the guarantee. Ted and Josie are married and have four children. Ted works as a salesman and earns $25,000 a year. Josie worked as an administrative employee, but this work ended a few months ago. Since then, it has been impossible for Ted and Josie to keep pace with their credit repayments. Ted and Josie feel that they will continue to slide backwards and that they will never catch up.
Ted and Josie are considering bankruptcy. Then you`ll see an ad saying, „If you`re struggling to pay your debts, there`s a possibility you can release without going bankrupt! Call me now. A secured creditor (for example. B a home or home loan) has the right to vote and receives dividends on the unsecured portion of its debt (for example. B if you owe more to your car or real estate credit than the value of the car or house). A debt contract is not the same as a debt consolidation loan or informal payment agreements with your creditors. The AfSA collects a lodge fee for each proposed debt contract. This is a fixed amount of $200 and is due each time a proposal is submitted. This fee is not refundable and must be fully paid in all circumstances. We will pay these fees on your behalf and recover them with your installation costs. With a debt contract, your creditors agree to accept a sum of money that you can afford.