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Debt

The Most Common Debt Agreement Misconceptions

Synopsis: Discover some of the most common myths when it comes to debts, so you can clear up any misunderstandings.

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The Part 9 Debt Agreement is a convenient tool that helps individuals in bad ties with debt. When people cannot seem to get a grip on their payments, the agreement serves as a legal contract between the individual and the creditor. It means that repayments can be agreed at an affordable pace that someone can manage.

When debts become unmanageable, many people are apprehensive about further legal agreements as there are common myths and misconceptions. This article seeks to clarify some of those up, so you can get back on track.

You will also discover that it is possible to find some highly reputable debt companies that clearly outline the Part 9 Debt Agreement. This way you can see the advantages and disadvantages from a neutral viewpoint to get the best understanding.

ELIMINATE YOUR BAD DEBT: BUSTING THE AGREEMENT MYTHS

  1. Your rating will be destroyed permanently

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If you have heard this one through the grapevine, it couldn’t be further from the truth. People often have a bad perception of debt agreements as they figure it only makes things worse.

They lack the facts and struggle to pin down how to operate in reality. With these negative opinions in circulation, many people think that it only makes credit ratings worse.

The truth is, since 2014, the Privacy Act’s new legislation meant missed payments and bad credit only remains on file for five years. Anything beyond this is scrapped so during this time, a debt agreement can facilitate the repayments and clearing of any money owed.

  1. Debt agreements aren’t smart and they’re the easy way out

Many seem to think that a debt agreement is the cowardly way out of debt. The reality is, many people fall into the cycle of debt due to the issues and unexpected events of life.

From buying a home to planning a funeral, unplanned expenses can cause debts to stack up. Agreements are in place to get things back in control, so they help and are a bold move.

  1. It’s cheating

Those individuals who think that debt agreements are a way of cheating are also entirely misinformed. The reasons as to why people get themselves into debt in the first place aren’t always so simple. Often, things happen that the individual cannot control or expect.

When someone gets to the stage that they need to sign a debt agreement they are being realistic about their financial circumstances. This means they can get to a good place again and get rid of their debts as they have been honest about the help they need.

  1. It’s similar to declaring bankruptcy

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There is another common myth that it’s practically the same as bankruptcy. Even though it is under the same classification, some differences make the agreement the best option. Secured debts such as mortgages aren’t included, it’s only those that are unsecured. This means that you can keep your life and assets while you sort out your debt issues.

Hopefully, we’ve cleared up a few common debt agreement myths, so if you were considering this option, you now have more confidence moving forward.

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Debt

Freedom Debt Relief Reviews the Essential Steps to Becoming Debt Free

Paying off your debt has tremendous benefits, not only for your finances, but for your emotional and mental health as well. Considering how stressful it is to be in debt, it’s no surprise that your emotional well-being will improve once you finally pay off your debt. Freedom Debt Relief reviews several steps that are essential to becoming debt-free. Make sure you incorporate each of these in your own debt journey.

Freedom Debt Relief Reviews the Essential Steps to Becoming Debt Free 5

Change the way you think about you debt.

Don’t look at your debt and think that you can’t possibly tackle all of it. That’s a mindset of defeat that will set you back before you even get started. Instead, look at your debt as something you can pay off one dollar at a time over a period of time. Freedom Debt Relief reviews the impact of mindset on debt payoff. Having positive mindset about your ability to pay off debt will go a long way in allowing you to reach that goal.

Make lifestyle changes at the first sign of financial distress.

We often underestimate the impact that financial stress will have on us long-term. Salary cut, job loss, increased expenses, are things we think we will bounce back from quickly. So, many people continue spending as though nothing as changed, when in reality, a lot has changed. Freedom Debt Relief reviews the importance of making adjustments to your spending whenever you have changes in your life. This will help keep your existing debt under control and keep you from incurring additional debt.

Start living by a budget.

If you’re currently overwhelmed by your debt, there’s a good chance you haven’t been living according to a budget. Once you decide to start your debt journey, Freedom Debt Relief reviews this as the perfect time to start budgeting. Use a budget to take a hard look at your income and your expenses to be sure that you have a solid plan for your spending throughout the next month. Once you’ve set a realistic budget, refer back to it often to be sure you’re sticking to it.

Commit to living within your means.

Living within your means, below your means even, is a critical part of getting out of debt. You must spend below your income so that you have extra money to put toward your debt. The more money you can free up in your budget, the more you can put toward your debt and the faster you can decrease the amount of debt you owe. Living within your means may require you to reduce or even eliminate some spending, but as Freedom Debt Relief reviews, the sacrifice is worth it for a debt-free life.

Don’t neglect your personal life in your pursuit to get out of debt.

Once you’ve committed to your debt plan, you may become so focused that you forget about yourself, your family, and your friends. Continue to cultivate and nurture relationships with your loved ones as you forge along your journey to get out of debt. Keeping your loved ones informed of your commitment to getting out of debt can help you choose social activities that won’t create a strain on your budget.

Know that paying off debt takes time, but payment by payment, you’ll become closer to the day when you can finally say you’re debt free.