Here at Debt Management Singapore we have a proven track record in helping people in Singapore solve their debt problems, preventing bankruptcy and successfully resolving their outstanding debts through a Debt Agreement.
To help you better understand what is a Debt Agreement, the expert team at Debt Management Singapore have provided a summary for you below. Please take a moment to carefully explore the Debt Agreements on offer, which is a highly affective and affordable alternative to bankruptcy.
What is a Debt Agreement?
A Debt Agreement is an agreement you can reach with your credit providers if you can no longer afford to repay an outstanding debt. Only people who have been struggling to cope with debt for some time can request a Debt Agreement. A Debt Agreement is essentially an arrangement with your credit providers to pay a pre-determined amount over an extended period of time (generally this ranges from 3 to 5 years). In the majority of cases you can settle your outstanding debts for less than what is originally owed and the remaining balance will be legally written off.
A Debt Agreement is regulated under the Bankruptcy Act so it is a formal agreement and as such it must be supervised by a Registered Debt Agreement
Administrator. Many people think that because it is regulated under the Bankruptcy Act, it is bankruptcy, but it should never be confused as bankruptcy. A Debt Agreement is a legal, cost-effective and easy to manage alternative to bankruptcy.
How do I apply for a Debt Agreement?
To set up a Debt Agreement, it is necessary that you select a Registered Debt Agreement Administrator, such as Debt Management Singapore. A Registered Debt Agreement Administrator must have the necessary accountancy qualifications and relevant experience in the industry in order to deliver the best outcomes for you.
To begin the process for applying for a Debt Agreement, speak to the friendly team at Debt Management Singapore on 6733 7479. Alternatively, submit our online form via the CONTACT US page
How much will credit providers accept?
In our experience, most credit providers want to receive at least 60 cents in the dollar (60% of the debt). So if you owe $100,000 in debt, your creditors want to receive at least $60,000
Why should I apply a formal Debt Agreement?
There are many benefits and advantages to applying for a Debt Agreement (especially if you compare these benefits to bankruptcy). These advantages are briefly listed below:
- Interest on your debt can frozen
- You only have to pay back what you can afford to repay (and the outstanding balance of the debt will be legally written off)
- All creditor enquiries and communications will be handled by our team (so you won’t be hassled by your credit providers)
- Once your debt agreement is accepted, your existing assets will be protected from most enforcement or debt collection action (compared to bankruptcy, where most assets will be sold)
- You will be free to travel overseas (compared to bankruptcy, where you won’t enjoy this freedom)
- You won’t be subject to a yearly assessment of your income (compared to bankruptcy, where you will be subject to a yearly assessment of your income and may need to pay mandatory contributions and these generally increase if you earn more)
What debts can go into a Debt Agreement?
Only unsecured debts can be resolved using a debt agreement, so generally this would include credit card debts, personal loan debts, store card debts or any financial shortfall on an old unsecured debt.
Secured debts are not eligible for a Debt Agreement. So if you have a secured debt, such as a car loan or a home loan, then these outstanding debts will need to be repaid outside of the Debt Agreement. If you have recently sold the asset which was subject to the security of the debt (car, home) then any shortfall can be used to pay off the Debt Agreement.
How is a Debt Agreement different to Bankruptcy?
A Debt Agreement should not be confused with bankruptcy. It is a legal alternative to bankruptcy. A debt agreement is a far more flexible arrangement with your creditors, when compared to bankruptcy and it is an arrangement where you have agreed to pay a certain amount of the outstanding debt over time.
The money you agree to pay will be used to repay your outstanding debts (after administration costs and expenses). If the amount you agree to pay into your Debt Agreement is less than what is outstanding, then the remaining balance of the debt will be legally written off (after you successfully complete your debt agreement).
Are there any consequences of applying for or entering into a Debt Agreement?
The consequences of undertaking a Debt Agreement include:
- The Debt Agreement will be listed on your credit report for 7 years
- Your name may be be published on a National Personal Insolvency Index
If you are unclear about these consequences please call our friendly team and we will discuss them with you.
Who should I deal with and trust to organize a Debt Agreement?
You should only ever deal with a Registered Debt Agreement Administrator
Here at Debt Management Singapore, we are a fully Registered Debt Agreement Administrator and we can help you organize the ideal Debt Agreement for your personal situation. Our expert Debt Consultants want to help YOU find the best solution to resolving your financial troubles. In fact, we won’t charge you any fees at all until we have fully qualified you as being eligible for a Debt Agreement.
To find out if you qualify for a debt agreement from Debt Management Singapore, contact our expert team on 6733 7479 for a FREE financial assessment!
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