Different types of debt are treated differently in a debt agreement

There are secured and unsecured debts. The former is tied to a person’s assets and the latter is not. When a person meets all his or her debt agreement, they are freed from all debts except the unsecured one. At this point creditors cannot take any action on the borrower. There are certain debts that cannot be discharged by a debt agreement in Australia such as frauds, child support, fines and student debts. Credit card debt solutions can have a negative impact on a person’s credit score but the advantage of this is paying only some percentage of the borrower actually owes the credit card company. Borrowers can approach creditors on their accord to negotiate the terms or a debt settlement company can be hired for this purpose.

There are a whole host of companies that offer debt management services in today’s world. The agency or the company helps an individual with regard to planning their payments and how much they can actually pay. The process starts with compiling a list of creditors as well as the amount owed to various people. Once the list is made, it is then compared to the person’s income and expenditure statement which includes rent, mortgage, cost of living and car repayment if any. This type of unique strategy is worked out because the debtor is unable to manage his debts anymore. This could be due to lack of knowledge or purely because the individual is overwhelmed with the situation that he or she is in.