Debt Agreements

Debt Agreements – An Alternative to Bankruptcy

Debt agreement solutions for Australians experiencing financial hardships

If you’re in debt and are legitimately struggling to pay off your financial obligations, there is an alternative to filing for Bankruptcy. Improve your financial future with a Debt Agreement through Debt Negotiators, by consolidating your unsecured debt repayments into one affordable repayment.

Having a bad credit history is blight on your finances, and can often deter lenders from approving your debt consolidation application. If you are in the red or struggling to meet your repayments as they fall due, then you have options available to you.

 

Part 9 Debt Agreements

 

If you’re struggling to make repayments to your creditors, Debt Negotiations can assist you in your application for a Part 9 Debt Agreement.

A Debt Agreement is legislated by the Australian government and is an option for dealing with un-manageable debts, and is an alternative to bankruptcy. All Debt Agreements are tailored around affordability and payments can be structured weekly, fortnightly, or monthly.

A Debt Agreement, if accepted, becomes a legally binding agreement (under Part IX of the Bankruptcy Act 1966 in Australia) between you and your creditors that can be facilitated by Debt Negotiators.

 

Debt Agreements

 

If you’re struggling to make repayments to your creditors, Debt Negotiations can assist you in your application for a Part 9 Debt Agreement. A Debt Agreement is legislated by the Australian government and is an option for dealing with un-manageable debts, and is an alternative to bankruptcy. All Debt Agreements are tailored around affordability and payments can be structured weekly, fortnightly, or monthly.

A Debt Agreement, if accepted, becomes a legally binding agreement (under Part IX of the Bankruptcy Act 1966 in Australia) between you and your creditors that can be facilitated by Debt Negotiators.

 

Who can propose Debt Agreements?

 

You may be eligible to propose a Debt Agreement if you fit the following criteria:

  • Have not been party to an act of Bankruptcy in the past 10 years
  • Have an after tax income limit of less than the prescribed threshold limit
  • Have unsecured obligations of less than the prescribed threshold limit
  • Your are insolvent

 

What are the benefits of a Debt Agreement?

  • Freeze your interest rates on unsecured debts
  • Prevent further legal action against your unsecured debt
  • Be released from your debt once agreed payments have been made
  • Make repayments in a way that you can afford, reducing further damage from debt
  • Avoid Bankruptcy

 

How will a Debt Agreement affect me?

Although entering into a debt agreement has some benefits, it also has some consequences these include:

  • Entering into a debt agreement will be recorded on your credit file for a minimum of 5 years or until you have completed your obligations under the terms of the debt agreement after 5 years. This will affect your ability to obtain a future credit. Your name will also be listed on the National Personal Insolvency Index (NPII), which is public record.
  • You will need to disclose to creditors when applying for credit that you are in a Debt Agreement.
  • If your Debt Agreement is accepted you will be required to make regular payments over an extended period of time. This will require you to stick to budget.

Debt Negotiators recommends that you explore all your option before entering into a Part IX Debt Agreement. This is to ensure that that you have made the right decision and a Debt Agreement option is the appropriate for you.

 

It is recommended that you consider the following first:

  • Speak to you creditors and attempt to organise a payment arrangement or make a hardship application to reduce your minimum monthly payment to make repaying your debts more affordable.
  • Speak to a Financial Counsellor Service, this is a free service. More information on Financial Counsellors and there locations can be found on this link https://www.moneysmart.gov.au/managing-your-money/managing-debts/financial-counselling.
  • Sell un-used assets of value and offer this to creditors as a possible lump sum payment to settle the outstanding debt.

For more information on the Debt Agreement option including its consequences please read our Frequently Asked Questions.

 

Choose Debt Negotiators as your Debt Agreement Administrators

Debt Negotiators is a registered Debt Agreement administrator (registration number 1403) with the Australian Financial Security Authority (AFSA) Debt Negotiators is also a member of PIPA (Personal Insolvency Professionals Association).

Debt Negotiators provide expert Debt Management solutions that are tailored to your individual circumstances. If you have been denied debt consolidation because of your bad credit rating and are dealing with harassing creditors demanding payments, then the Debt Agreement may be the option for you.

 

When is it time to consider a Debt Agreement?

When debt is becoming too much to handle, and you are struggling to keep up with your repayments, a debt agreement might be a suitable option. Many people turn to bankruptcy when they are struggling with debt. While bankruptcy is an option that can clear your debt, it has many consequences that are far-reaching when compared to other solutions. 

Debt Negotiators can help you to come to a debt agreement with your creditors, finding you a solution that helps you to avoid bankruptcy. We can help you to negotiate informal debt agreements, and work with formal government debt agreements such as the Part 9 debt agreement, to help you to settle your debt.

If you enter a debt agreement, you will be able to make periodic payments or lump sum payments in a way that suits you, and your debt will often be reduced to an agreed amount.

Debt agreements still have negative financial implications, and are a solution that should only be considered in times of extreme debt, but very often if an agreement can be made it is much more positive than declaring bankruptcy. Debt Negotiators can help you to reach a debt agreement, and settle your debt with creditors. Contact us today for advice, or to arrange a consultation. 

We offer debt agreement services in Melbourne, Sydney, Brisbane, Perth and Adelaide.