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Bad Credit Finance – Entering into a Government Approved Debt Agreement

Posted on Sunday March 15, 2015, by | Categories Car Finance

You here advertisements every-day, on television, radio on the internet claiming to solve your credit problems by entering into a Government Approved Debt Agreement.

These ads sound very attractive. All debts merged into one affordable payment, no interest, get you back on track etc. It all sounds too good to be true.the truth of debt agreement for bad credit car finance

In reality it is. A Government Approved Debt Agreement generally is an act of Bankruptcy, called a Part IX agreement.

What this really means to you is:

1. You are now bankrupt, your credit file will be noted at being Bankrupt Part IX
2. While this agreement is in place you will not be able to get any finance agreement approved. You will even have difficulty entering into a mobile telephone contract.
3. Once the agreement is paid in full, your credit file will be noted, you are now a discharged bankrupt. This remains on your credit file for seven years.
4. You will still have a lot of problems trying to arrange any finance agreement. You certainly won’t be approved by a mainstream lender such as a bank.

The correct method of dealing with any bad credit financial problem, is to make contact with the relevant financiers and enter into a “hardship” agreement.

The financier will note your file, they will probably require you to supply evidence of hardship (the fact you cannot afford to pay) they will normally enter into an agreement with you, without entering a default onto your credit file.

It is extremely important that you keep this agreement, so don’t agree to anything you cannot repay.

Once your problems have abated, return to the original contract payment terms.

Your credit rating will still be poor, but only with the company you have the agreement with. It won’t be a matter of public record.

If you are unable to convince a financier to assist you with a hardship agreement and you have explored every other possible option. This is the time to consider a Government Approved Debt Agreement?

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