Speak to us today 1300 351 008

Call Us
See Your Options
Getting out of debt

How to get out of debt: the options, step by step.

Getting out of debt starts with two numbers: what you owe, and what you can realistically pay. Once those are clear, the options are much easier to compare. Below are the first steps we go through with you, then the real options, each with its downsides.
Answer 9 quick questionsCall 1300 351 008
Fee-based service. Fees, and any commission we receive from a lender, are explained before you decide.
Good to know before you start
No single option suits everyone, and every option has trade-offs
Some options are recorded on your credit file
Debt agreements, PIAs and bankruptcy are formal insolvency options under the Bankruptcy Act
A consolidation loan is new credit. Lending criteria apply, and some applications are declined

See the options →

LicensedAustralian Credit Licence 390820
Registered with AFSADebt agreement administrator 1403
Since 2009Bankstown-based team
Real reviewsOn ProductReview.com.au
First steps

Start with the full picture

Before any option makes sense, you need a clear view of where things stand. These are the first steps we go through with you on the call.
1

List every debt
Who each one is owed to, the balance, the interest rate, the minimum repayment and whether anything is overdue. We include everything: credit cards, personal loans, buy now pay later, car loans, tax debts, utility arrears and money owed to family.
2

Work out a realistic budget
What comes in each week or month, and what has to go out: rent or mortgage, groceries, utilities, transport, insurance, childcare and school costs. We use real figures, not best-case ones.
3

Put essential bills first
Keeping a roof over your head, the power on and food on the table comes before unsecured debts such as credit cards. Secured debts, like a car loan you rely on to get to work, also sit near the top, because the asset is at risk if repayments stop.
4

Match the option to the numbers
What’s left after essentials is what’s realistically available for your debts. That figure, and how it compares with what you owe, is what points towards one option over another.
What to have handy for the call
Recent statements for each debt
Your payslips or other income details
Your regular bills and living costs
Any letters or notices from creditors or collectors
Details of any court action, defaults or judgments
If some of it is missing, that’s fine. We can start with rough figures and fill in the gaps together.
The real options

Your options for getting out of debt

Once the numbers are clear, these are the options we work through with you. Some are informal, some are formal under the Bankruptcy Act, and every one of them has downsides. For a side-by-side view, see all debt solutions.

Talk to creditors through an informal arrangement
We negotiate new repayment terms with each of your creditors, based on what your budget can carry. It isn’t a formal insolvency option, and it isn’t listed on the National Personal Insolvency Index.
Good to know: creditors don’t have to agree, interest and fees may keep running, and it may show on your credit report as repayment history or financial hardship information.

How informal arrangements work →

Debt consolidation
One new loan pays out several debts, leaving a single repayment. It can make sense when the new loan costs less overall than what you’re paying now, and the repayment fits your budget.
Good to know: lending criteria apply and some applications are declined. Applying records a credit enquiry, a longer term can cost more overall, and a loan secured on your home puts the home at risk.

How consolidation works →

Debt agreement (Part IX)
A legally binding agreement with your creditors to repay an amount you can afford over a set time, usually up to three years, or up to five if you own your home. Debt Negotiators is an AFSA-registered debt agreement administrator.
Good to know: it’s a formal insolvency option and an act of bankruptcy, with income, debt and asset limits. It’s on the National Personal Insolvency Index for 5 years from when it’s made, or until it’s completed if that’s later, and on your credit report usually for up to 5 years, or longer in some cases.

Debt agreement pros and cons →

Personal insolvency agreement (Part X)
A formal agreement that’s often looked at when debts, assets or income are above the debt agreement limits. It’s run by a registered trustee, who makes an offer to your creditors.
Good to know: it’s an act of bankruptcy and is listed on the National Personal Insolvency Index permanently. You can’t manage a corporation until it’s complete, and trustee fees apply.

How Part X agreements work →

Bankruptcy information
Bankruptcy releases you from most debts, and usually lasts 3 years and 1 day. We explain how it works and how it compares with the other options.
Good to know: it’s listed on the National Personal Insolvency Index permanently. Assets can be sold, income above a set amount means compulsory payments, and overseas travel needs the trustee’s permission.

How bankruptcy works →

Credit file corrections
If something on your credit file looks wrong, such as a default you don’t recognise, we review it and ask for a correction where there are grounds to.
Good to know: correct listings can’t be removed. We’ll tell you plainly if a listing looks accurate.

How credit file reviews work →

Informal or formal

The biggest difference between the options

Some options rely on each creditor or lender agreeing. Others are formal arrangements under the Bankruptcy Act, with longer-lasting consequences.
Informal options
Informal arrangements and consolidation loans
Not acts of bankruptcy
Not listed on the National Personal Insolvency Index
Each creditor or lender decides for itself
Nothing forces a creditor to accept the terms or stick to them
Formal options
Debt agreements, personal insolvency agreements and bankruptcy
Made under the Bankruptcy Act
Once in place, they bind the unsecured creditors they cover, with some exceptions
Listed on the National Personal Insolvency Index
Recorded on your credit report, usually for up to 5 years, or longer in some cases
Choosing

Which option fits which situation?

There’s no shortcut, but these are the questions we work through with you.
If you could repay everything over time on adjusted terms, an informal arrangement may be worth trying first.
If a loan looks realistic and would cost less overall, consolidation may suit.
If you can’t repay in full in a reasonable time and you’re within the limits, a debt agreement may be worth considering.
If your debts, assets or income are above those limits, a personal insolvency agreement may be.
If there’s no realistic way to repay, it’s worth understanding how bankruptcy works before you decide anything.
While you’re working it out
Keep paying essential bills where you can
Avoid new credit to cover existing repayments
Keep every letter and notice you receive
Tell us if a creditor has started legal action
Don’t sign anything you haven’t read and understood
How we help

How it works with Debt Negotiators

1

Answer 9 quick questions
About a minute. Roughly what you owe, who to, and what comes in each week. Start here.
2

We go through the numbers with you
Your debts, budget and essential bills, so we can see which options are worth comparing.
3

You hear your options, then decide
What each option involves, what it costs and its downsides. If an option isn’t right for you, we’ll say so. There’s no obligation to go ahead.
Costs, credit file and referrals

What it costs: Debt Negotiators is a fee-based service. Fees are explained before you decide, and the first conversation costs nothing. If you take out a loan we arrange, we may receive a commission from the lender. We’ll tell you about it before you decide. The rates are in our Credit Guide.

Credit file: Answering the 9 questions doesn’t involve a credit check. Some options do affect your credit file if you go ahead, and we’ll tell you which ones before you decide.

Referrals and payments: Debt Negotiators isn’t a trustee. We work with a panel of registered trustees. If we refer you to one, we may receive a referral payment, and we may charge fees for pre-insolvency work. We’ll tell you about any payment or fee before you decide.

Getting out of debt: common questions

What’s the first step to getting out of debt?

List every debt and work out a realistic budget. Those two figures show what’s available for your debts each month, and that points towards the options worth comparing. We go through both with you on the call.

Which debts should I pay first?

Essentials usually come first: housing, utilities, food and getting to work. Secured debts, such as a car loan, sit near the top because the asset is at risk if repayments stop. Unsecured debts like credit cards come after that. Every situation is different, so we look at yours before suggesting anything.

Can I get out of debt without going bankrupt?

Often, yes. Informal arrangements, consolidation loans, debt agreements and personal insolvency agreements are all alternatives to bankruptcy. Debt agreements and personal insolvency agreements are still formal insolvency options with their own consequences, and we explain each one before you decide.

Will getting help affect my credit score?

Answering the 9 questions doesn’t involve a credit check. Applying for a consolidation loan records a credit enquiry. Informal arrangements may show as repayment history or financial hardship information. Debt agreements, personal insolvency agreements and bankruptcy are recorded on your credit report, usually for up to 5 years, or longer in some cases.

Is debt consolidation a good way to get out of debt?

It can be, when the new loan costs less overall and the repayment fits your budget. It doesn’t change what you owe: the balance moves to a new lender. Lending criteria apply, some applications are declined, and a longer term can cost more overall. More on debt consolidation.

What’s the difference between an informal arrangement and a debt agreement?

An informal arrangement is new terms agreed with each creditor separately, and creditors don’t have to agree. A debt agreement is a formal agreement under Part IX of the Bankruptcy Act. Once accepted, it binds the unsecured creditors it covers, but it’s an act of bankruptcy and it’s listed on the National Personal Insolvency Index.

How long does it take to get out of debt?

It depends on what you owe, what you can afford and the option you choose. A debt agreement usually runs for up to three years, or up to five if you own your home. Bankruptcy usually lasts 3 years and 1 day. Informal arrangements and loans run for whatever term is agreed.

How much does Debt Negotiators cost?

Debt Negotiators is a fee-based service. Fees depend on the option and the work involved, and they’re explained before you decide anything. The first conversation costs nothing.

Work out your next step

Answer 9 quick questions, then we call to go through your options and their downsides.
Answer 9 quick questionsCall 1300 351 008
Debt Negotiators is a fee-based service. The information on this page is general and doesn’t take your circumstances into account. Outcomes depend on your situation, and no outcome is guaranteed. Formal options such as debt agreements and personal insolvency agreements can affect your credit report and your ability to get credit. ACL 390820 · AFSA RDAA 1403.
Call Us Now

Talk to us about your options. Debt Negotiators is a fee-based service, and fees are explained before you decide.
1300 351 008

or enquire online now.

Enquire Now

Explore Topics