Informal Agreements

An often overlooked but simple solution to debts is to enter into an informal debt agreement with your creditors. If you are having difficulties with your debts, your creditors may be willing to freeze interest payments for a certain amount of time, or may be willing to reduce the amount owed, or they may simply just give you more time to pay.

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The main problem with Informal debt Agreements is that they are not binding on all the creditors. That is to say, if one creditor refuses to enter into an informal debt agreement, they can still choose to pursue legal action.

Informal debt agreements have a higher chance of success if there are only a few creditors as the less parties (creditors) involved in the negotiation of the informal agreement, the higher the chances that all the creditors will accept the terms.