Debt Agreements, Informal Arrangements, Debt Negotiation and Debt Consolidation. These are all terms which are frequently thrown around when you begin trying to access debt help. It’s hard to know which solution is right for you, and which solution will provide the best outcome for you.
To help you out, we’ve put together a rundown of what a Debt Agreement is;
- A Debt Agreement is commonly called a Part IX Debt Agreement
- It is a legislated debt solution housed under Part 9 of the Bankruptcy Act 1966
- It freezes all interest and charges on the debts included in the agreement
- You are only able to add unsecured debts to your agreement
- All unsecured debts must be included if you decide to enter a Debt Agreement
- Your overall payable debt may be reduced
- As part of your agreement you only pay back the amount you can afford, not what your creditors demand
- The normal term for an agreement is 5 years, but depending on your circumstances it may be shorter or longer
Am I eligible for a Debt Agreement?
In order to be eligible you must meet the following criteria:
- Not have been bankrupt or entered into a Debt Agreement in the last 10 years
- Have unsecured debts of less than $108,162.60,
- Not have more than $108,162.60 of equity within a property or other assets
- Have an after tax income of less than $81,121.95
Check out our full Debt Agreement page here to see more about the eligibility criteria.
If you do not meet these eligibility criteria we do have a number of debt solutions available, give a consultant a call on 1300 887 211 or hit chat live now to talk to someone about your situation.
What are the negatives to a Debt Agreement?
Some of the negatives include:
- Your credit rating is affected for a minimum of 5 years
- You are listed on the National Personal Insolvency Index for a minimum 5 years
- You will have difficulty accessing any new forms of credit for the life of your agreement, including:
- Personal loans
- Credit Cards
- Car Loans
Is it the right choice for me?
Deciding whether or not a Debt Agreement is the best option for you can be difficult. There are a lot of uncertainties and questions to be answered. As a Debt Agreement administrator, Debt Cutter is qualified to assess your situation and discuss the ins and outs of a Debt Agreement as well as talk you through the other options available to you.
Whilst it may seem like a Debt Agreement is the right solution, it may not be, it’s important you talk to a qualified provider about what options are available and which solution fits your situation.
Give Debt Cutter a call today on 1300 887 211 to chat to our consultant to see if this is really the right solution.