Bankruptcy is a word that is still regarded with a certain amount of stigma in society, so any wonder any normal person struggling with debts will do whatever they can to avoid it. Obviously, if you are in financial difficulty, it is always advisable that you speak to a bad credit expert about ways you can get out of debt, and sometimes a debt agreement may be suggested as a possible way out of the dark hole of debt.

What is a Debt Agreement and how can one Save Me from Bankruptcy? A debt agreement is a simple, legally binding agreement with your credit providers or lenders. It is considered to be an act of bankruptcy, however, you can still secure finance – including a mortgage – if you have a debt agreement. Legally, these are referred to as Part IX (Nine) and Part X (Ten) and upon approval of your creditors (at least 75% or more of the dollar value of your debt) such agreements you can put in place may allow for:

• A payment of less than the full amount of all or any of your debts, freeing up extra cash each month; • A stop on the payment of your debts or a stop on the interest that accrues on your debts, allowing you to get some money together to make the payments; or • A transfer of property from you to one or more of your creditors in lieu of full or part payment of the money you owe to them.

Can Anybody Qualify for a Debt Agreement? As great as debt agreements may sound, it is important to note that not everybody is eligible. A debt agreement may be proposed by you if you:

• Have not been bankrupt, or used a debt agreement in the last ten years; • Have a net tax income of less than $52,907 each year; • Have unsecured debts of less than $70,543; and • Are unable to pay your debts when they fall due each month.

Also, your debt agreement must be approved by your creditors. To enjoy the benefits of a debt agreement, at least 75% of the dollar value of your creditors must agree to your proposal.

The Golden Rules of the Debt Agreement Remember that when you are in financial difficulty, you are in a vulnerable position and there are businesses out there, claiming to be bad credit experts, who will take you for a ride. To make sure a debt agreement saves you from bankruptcy and doesn’t land you in it, here are some points to follow:

• Find a reputable bad credit specialist who will negotiate your debts down, proposing a debt agreement that you can afford; and • Ensure you pay every instalment of your debt agreement.