Important Factors To Consider About Debt Agreements

A debt agreement provides debt relief to many thousands of Australians each year, however it is important to understand fully the ramifications of proposing and entering into a Debt Agreement.

How does a Debt Agreement work? Find out more


A Debt Agreement is

  • A legislated alternative to Bankruptcy
  • A way out of a debt crisis
  • For people who cannot pay their debts when they fall due

Debt Agreement is NOT:

  • Bankruptcy
  • A Debt Consolidation Loan
  • An agreement to borrow/loan more money

Debt agreements:

  • Have further protection under law than private arrangements
  • Allow you to keep your assets, as long as you keep your commitments to those creditors
  • Allow you to maintain control of your finances
Debt Agreement Consequences

A debt agreement is a legislative alternative to bankruptcy. Although not bankruptcy, it is an “act of bankruptcy.”

Unlike bankruptcy a debt agreement enables you to keep hold of your assets and maintain control of your finances. It is important to note that only your unsecured debts are put into a Debt Agreement. That means that as long as you continue to pay your secure debts according to your contractual obligations, in addition to the negotiated debt agreement payment you keep hold of your assets.

At the end of the process (generally around 3 to 5 years) you are released from the unsecured debts that were in the Debt Agreement.

However when proposing a Debt Agreement to your creditors you are officially putting your hands up and declaring that you are unable to pay your debts, as you originally committed to, when they fall due, that is you are insolvent.

What does this mean to you?

  • Your declaration of insolvency is registered permanently on the National Personal Insolvency Index (NPII)
  • A Debt Agreement is recorded on your Commercial Credit Reference file for five (5) years. Your ability to obtain further credit during this time will be affected. After five years or the end of the Debt Agreement period, whichever is greater, this is removed.
  • The debt agreement does not release another person from a debt jointly owed.
  • For any credit/rental/buy over $5,333 you must inform the creditor of the fact you are in a Debt Agreement.
  • You may continue to operate a business, unless terms state otherwise, however you must notify all parties of the Debt Agreement.

Debt Cutter. We Care Because We’ve Been There

When your debts are too large to manage and your quality of life is affected by debt, it’s time to take action. It is not easy knowing where to go to find answers. At Debt Cutter, we understand. Many of our debt consultants have been through similar financially distressing circumstances and some have used a debt agreement to take control of their financial situation turning their lives around. That’s why we care about helping you to find a manageable debt solution. It is not an easy decision to make and you do need to think carefully about the consequences.

Debt Cutter is a Government Registered Debt Agreement Administrator (#985) and is able to provide advice on whether a debt agreement suits your situation. We care, try us, you’ll hear the difference. 1300 887 211 or Request a free phone consultation call back.

Here is what Debt Cutter will do to help you through your challenging debt situation.

When you call Debt Cutter we will discuss all of the details with you and assist you to explore your options. If you think a debt agreement might be a solution we then make a detailed assessment of your current level of unsecured debts and budget to be presented to your creditors. This is reviewed by you before any proposal to the creditors is made.

In addition, even after the debt agreement is accepted we support you for through the entire debt agreement process.

With a debt agreement if you do not make the payments as agreed your creditors can apply to the court to make you bankrupt.  At Debt Cutter, if your circumstances change, our staff continue to help you each step of your journey out of debt by continuing to discuss ways you can adjust your budget to meet your repayments. So you do not have to go bankrupt.

Here is what Mick from Queensland has said about this process.


Debt Cutter were just open and honest with us every time we contacted them. Every now and again we would make extra payments to keep ahead and have a buffer. If we had issues they just told us how much leeway we had and enabled us to work it out with them. Any time we rang they were understanding and helpful. Sometimes all I did was send a text message. This was good as it saved me any embarrassment.Mick, Brisbane QLD

 We only ask one thing of our clients, that they keep in touch and let us know if something has come up, so we can discuss it with them.

If you need debt relief, inquire today for a free phone consultation, or call us today on 1300 887 211. Cut your debt and live your life!

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