Debt Agreements
A Debt Agreement is a government legislated option for negotiating an easy and affordable payment arrangement with creditors consolidating debt with a loan not be an option. A Debt Agreement, if accepted becomes a legally binding agreement between you and your creditors that can be facilitated by Debt Negotiators. So if you’re struggling to meet your minimum monthly payments, are unable to consolidate debt due to a poor credit record and feel you are genuinely unable to repay your debts, talk to Debt Negotiators today about the possibility of facilitating a debt agreement on your behalf.
What is a debt agreement and how does it work?
A debt agreement is a government legislated alternative to bankruptcy. All Debt Agreements are based on affordability with payments structured either weekly fortnightly or monthly based on your personal budget which is structured by your consultant. Once the proposal has been structured you will be required to sign the relevant documents.
The proposal will then be sent to ITSA (Insolvency Trustee Services of Australia) to send to your creditors who will then have 35 days to vote on the proposal, whilst in the voting period your interest on all unsecured debts will be frozen and future fees stopped. All recovery and legal action will also be ceased. For your debt agreement to be accepted 50.1% of your creditors will need to vote in favour. Once completed you will no longer owe your creditors money and will be debt free. A debt consolidation loan differs in that you are essentially transferring debt from one institution to another in the form of a loan. Although you will only have one creditor you will still have interest accruing on a monthly basis.
A debt agreement can be constituted as:
- Weekly, Fortnightly or monthly repayments
- Deferral of payments for an agreed period
- The sale of an asset to replace the money owing
- A single lump sum divided among creditors
Who can proposal a debt agreement?
You may be eligible to propose a debt agreement if you fit the following criteria.
- Have not been involved in a part of the bankruptcy act in the past 10 years
- Have an after tax income of less than $66,284.40 per annum;
- Have unsecured debts of less than $88,379.20;
- Are insolvent
What are the benefits of a debt agreement?
The benefits of a debt agreement include an end to legal action and recovery from creditors, freezing of interest, avoiding bankruptcy and the likelihood of freedom from debts. Debt agreements, in contrast to consolidating debt, mean you pay back what you can afford rather than borrowing from a lender to pay out debts and combine all debt into single, manageable repayments.
A debt agreement is not guaranteed to be accepted as it is made at the discretion of your creditors who can refuse to accept a Debt Agreement. Before taking out a debt agreement, it is vital that you understand the potential consequences of the process, including how it could impact your credit record.
For further information on debt agreements, or to organise a confidential meeting with a personal debt consolidation or debt agreement consultant, call 1300 351 800 today.
Click here for some frequently asked questions on the Debt Agreement Options.
The Debt Agreement Process
A Debt Management Specialist will
- Complete a Comprehensive Budget
- Provide you with all the information on the Debt Agreement option
- Talk to your creditors and prepare documents for you
- Lodged the Debt Agreements to ITSA
It’s that simple, let Debt Negotiators negotiate a debt agreement on your behalf today.
For more information about any of Debt Negotiators’ Debt Solution services, including Debt Consolidation, Debt Analysis, Mortgage Consolidation and Refinance, Budgeting and Bankruptcy Loans and Advice, call 1300 351 008 today or contact us online.
Easy Payment Plan Options
