If you make all repayments under the agreement, you will be released from the remaining debts contained in the agreement. If you do not reach the end of the agreement, the agreement will be completed and the creditors will track down the entire debt again, plus all the interest accrued in the meantime. Declaring bankruptcy means explaining to your creditors that you can no longer afford the repayments you owe them. A successful insolvency application frees you from most of your debts. A debt agreement is designed as an alternative to bankruptcy that can protect your wealth. As long as you keep pace with your asset repayments, such as your car and house loan, as well as your debt contract repayments, your wealth should be protected in general. A debt agreement includes only justifiable unsecured debts. Creditors and collection companies can be relentless, which only contributes to the stress you already feel when missing credit repayments. No, although debt agreements are managed under bankruptcy law, they are an alternative to bankruptcy. However, if you submit a proposal, you commit « an act of bankruptcy ».
For a proposal to be accepted, AFSA must obtain « yes » votes from a majority of your creditors who owe at least 50% of your total debt between them. Creditors who vote against the debt agreement are also bound by it, provided that the required majority voted « yes ». Rushika fought to pay off 3 credit cards and a private loan. She works, but she is a very young employee and never seems able to pay much more than the interest on her credit cards. .