Debt Agreement - Part IX Arrangement

A Debt Agreement is a formal agreement you may reach with your creditors to repay debt over a period of time. Typically Debt Agreements are structured over 3 years or some times up to 5 years. Under a Debt Agreement you will pay to creditors what you can afford to repay after necessary household expenses. Debt Agreements can be a very powerful tool to deal with unsecured debt and as such they are formally regulated under the Bankruptcy Act. Typically a Registered Debt Agreement Administrator will be appointed to help you set up and manage the Debt Agreement. You need to be eligible for a Debt Agreement as strict guidlines apply.  Debt Free can help you establish if you are eligible for a Debt Agreement.

A Debt Agreement may help you avoid the stigma of bankruptcy. 

Debt Agreements are most suitable for people who have unsecured debts which exceed $8,000 but are less than $84,484.40 and you cannot repay that debt.  If you have unsecured debts totaling more than $84,484.40 then don't worry as you may still be able to avoid bankruptcy with a Personal Insolvency Agreement.  

Given a Debt Agreement is a legally binding agreement with your creditors it must first be approved by them. We will put your proposal to your creditors and in many cases they will accept to receive something less than full payment. Once approved by your creditors, a Debt Agreement will protect you against any further legal action which they may have been entitled to take against you, which may have resulted in your bankruptcy.

With a Debt Agreement, you agree with your creditors what you'll pay over the term of your agreement. The interest on your debts will be frozen at the time your agreement is accepted by your creditors. This will enable you to make one single payment each month over the period of your Debt Agreement. Your Debt Agreement Administrator will distribute the surplus funds to your creditors after they deduct their fee which will also be approved by your creditors.

For more information on a Debt Agreement please refer to Frequently Asked Questions.

Do you qualify for a Debt Agreement? Find out by giving Debt Free a call on 1800 98 10 70.