A debt agreement is a binding agreement between an individual and their creditors where creditors agree to accept a sum of money which the debtor can afford. Proposing a debt agreement is an act of bankruptcy
A debt agreement is an option to assist individuals with unmanageable debt and is an alternative to bankruptcy. Debtors are released from most of their debts when they comply with all obligations under the agreement.
In offering a debt agreement an individual may make installments or a lump sum payment for an amount less than the total amount owed to creditors.
Debts can be frozen for a period of time until an individual gets back on their feet. An individual’s unsecured debts, assets and after-tax income must be under certain limits to propose a debt agreement.
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For further information on Debt Agreements contact the team at Rapsey Griffiths for a confidential consultation.