Stop legal action and calls from creditors and collection agencies
Debt agreements are administrated in accordance with Part IX of the Bankruptcy Act 1966
Become debt free in 3 to 5 years
A Debt Agreement is a legally binding agreement between you and your creditors to negotiate and settle debt without becoming bankrupt. It allows you to work with your creditors to repay an affordable percentage of your debts over a fixed time period, usually three to five years.
These payments are made to your appointed AFSA debt agreement administrator, rather than directly to your creditors. Once you complete your payments and the agreement ends, the remainder of the debt is dismissed.
A Debt Agreement is a solution for those dealing with unmanageable debt and wanting to protect assets like a home. Advantages may include:
A Debt Agreement isn’t right for everyone. There is a qualification process and the risks include:
Below are the types of debts that are generally covered by an agreement:
Debts that are not covered, or require special conditions if they are considered, include: Secure debts (home loan, car loan, etc), joint debts, overseas debts, HECS/HELP/SFSS, court fines, child support
General qualification criteria for debt agreement (Part IX) include:
*Note – Debt Agreements are not debt consolidation loans.
In this scenario, a debt agreement could reduce the total debt owed by $15, 300 to $34,200 and change the monthly repayment from $1,406 to $570 over 5 years.
A difference of $836 a month & saving thousands in future interest.
| Credit Card #1 | $12,000 | $300 |
| Credit Card #2 | $5,000 | $125 |
| Credit Card #3 | $10,000 | $250 |
| Personal Loan | $8,000 | $188 |
| Store Card | $5,000 | $137 |
| Payday Loan | $1,500 | $226 |
| Overdraft | $8,000 | $180 |
| Total Owed | $49,500 | $1,406 |
To be a Debt Agreement Administrator, a person/business must go through a registration process with the Australian Financial Security Authority (AFSA).
A full list of currently registered practitioners can be found here.
Debt Agreement proposals and Debt Agreements are listed on the National Personal Insolvency Index (NPII)
The length of time a debt agreement may be shown on your credit report depends on how the agreement ends. In many cases the debt agreement will appear on your credit report for five years from the date you enter into it.
Obtaining a home loan after successfully completing a debt agreement is possible. However this will be dependent upon your new financial situation and choice of lender. In many cases finance from a traditional bank will be difficult.
Nonbank’s and specialist lenders may be able to assist. Speaking to a broker who has access to multiple lenders can help.
Obtaining a car loan after successfully completing a debt agreement is possible. This however will be dependent upon your new financial situation and choice of lender. In many cases finance from a traditional bank will be difficult.
Nonbank’s and specialist lenders may be able to assist. Speaking to a broker who has access to multiple lenders can help.
A debt agreement is a solution to help those dealing with unmanageable debt. Its purpose is to help those struggling with debt to maintain repayments and not go bankrupt.
Yes. Bad credit should not stop you qualifying, unless you have been bankrupt, or have had a Part IX or personal insolvency agreement within the last 10 years.
