How much does it cost to get a debt agreement?
When you get a debt agreement, it does come with a cost. You have a trustee who takes care of everything from the proposal to your creditors to the payments that are made to them. They have to be paid somehow for all of the work that they do and they do this by charging you a fee to get the job done.
Some of the fees may vary, depending on what company you use to take care of your debt agreement for you. However, you can expect to pay at least $200 for the document processing fee. You could also be looking at a fee of around 25% of the amount accepted by the creditors (this is usually a lower amount incidentally). This fee is included in the payments that you make each month to the trustee, so your overall debt should not increase, but rather decrease. The trustee then takes out their part of the payment and they remit the rest to your creditors.
As for how much you have to pay to your creditors, it depends on what is in your proposal. Your trustee will work with you to determine how much you can afford to pay your creditors. The proposal is then drawn up and the creditors are notified. A meeting is scheduled between the creditors, you, and your trustee so that your creditors can view the proposal. Your trustee will work to convince your creditors that it is better for them to accept the proposal than for you to file bankruptcy and them lose everything. Many creditors prefer to have some of the debt than completely lose the money.
Once the proposal is agreed upon by the majority of the dollar value of your creditors, your payments will begin soon after. The length of the agreement will depend on how much debt you are in, but these agreements usually do not exceed 5 years and are usually not less than 3 years. As far as how long your credit report is affected, you can expect your debt agreement to be listed there for 7 years and you will be listed on the National Personal Insolvency Index for life.
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