Commonwealth Bank Debt Agreement: What You Need to Know
If you`re struggling with debt and you`re a Commonwealth Bank customer, there might be an option for you: a debt agreement. Here`s what you need to know.
What is a debt agreement?
A debt agreement is a legally binding agreement between you and your creditors. It can be an alternative to bankruptcy, and it allows you to pay off your debts over a set period of time while protecting you from legal action by your creditors.
What are the benefits of a debt agreement?
There are several benefits to a debt agreement:
– You can make one regular payment instead of multiple payments to different creditors
– Your creditors can`t take legal action against you while you`re making your payments
– You may be able to reduce your overall debt and interest payments
What are the risks of a debt agreement?
There are also some risks to be aware of:
– Your credit rating will be affected for up to 5 years
– You may have to pay fees to the administrator of your debt agreement
– You may have to sell assets to pay off your debts
– If you don`t stick to the terms of your debt agreement, your creditors can take legal action against you
How do I set up a debt agreement with Commonwealth Bank?
You can`t set up a debt agreement directly with Commonwealth Bank. Instead, you`ll need to work with a debt agreement administrator who is registered with the Australian Financial Security Authority (AFSA). The administrator will negotiate with your creditors on your behalf and set up a payment plan for you.
Once your debt agreement is in place, you`ll make regular payments to the administrator, who will distribute the money to your creditors.
It`s important to work with a reputable debt agreement administrator. You can find a list of registered administrators on the AFSA website.
Is a debt agreement right for me?
A debt agreement isn`t the right solution for everyone. It`s important to consider all your options before making a decision. You may want to talk to a financial counsellor or advisor to get advice on your particular situation.
If you do decide to go ahead with a debt agreement, make sure you understand the terms and conditions and that you can afford the payments.
In conclusion, if you`re a Commonwealth Bank customer struggling with debt, a debt agreement may be an option for you. However, it`s important to weigh the benefits and risks and seek professional advice before making a decision.