If you`re struggling with debt, a voluntary agreement with your creditors might be the solution you need.
A voluntary agreement with creditors, also known as a voluntary arrangement or a debt repayment plan, is a legally binding agreement between you and your creditors. The idea is to negotiate a plan for you to pay back a portion or all of your debts over a set period of time.
The key benefit of a voluntary agreement with creditors is that it is a way to avoid bankruptcy while still paying off your debts. It can also give you some breathing room to get your finances back on track.
The process of setting up a voluntary agreement with creditors typically involves working with an insolvency practitioner who will assess your finances and negotiate with your creditors on your behalf. You`ll need to provide a list of your debts and income, as well as any assets you own.
Once the agreement is in place, you`ll make regular payments towards your debts based on the agreed-upon schedule. The payments are typically made over a period of three to five years, after which any remaining debt is usually written off.
There are a few things to consider before pursuing a voluntary agreement with creditors. Firstly, the process can affect your credit score and remain on your credit report for up to six years. It`s also important to be realistic about your ability to make the payments, as failing to do so could result in the agreement being terminated and your creditors pursuing legal action.
It`s worth noting that voluntary agreements with creditors are not available to everyone and can vary depending on the jurisdiction you reside in. It`s important to seek advice from a qualified professional before deciding if this is the right solution for you.
If you`re struggling with debt, a voluntary agreement with creditors could be the solution you`ve been looking for. It`s a way to avoid bankruptcy while still paying off your debts over time. However, it`s important to be aware of the potential impact on your credit score and to make sure you can realistically commit to making the payments. If you`re unsure whether this is the right solution for you, seek advice from a qualified professional.