Debt Agreement
What is it?
A debt agreement (also known as a Part IX agreement) is an alternative to bankruptcy. It is a legally binding agreement between you and your creditors where they agree to accept a sum of money that you can afford to pay.
What are the benefits?
A debt agreement enables you to deal with debts by freezing provable unsecured debts (such as personal loans, credit cards, bills and tax debts) and any interest, enabling you to repay your creditors over an extended period of time.
What are the consequences?
You commit an act of bankruptcy. You will be listed with credit reporting agencies for up to seven years, which will affect your ability to obtain credit. Secured creditors may sell your assets (e.g. your car) if you default on payments to them.
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