Who Can Enter Into a Debt Agreement?

Debt Consolidation for Unsecured Debt

Simply, a debt agreement is a formal arrangement between you and your creditors to settle unsecured debts. It’s for people that can’t get a loan, are struggling and want to avoid bankruptcy. A debt agreement is an option that does not involve borrowing money or paying interest. With the consent of your creditors, typically you will be required to make one, affordable repayment to settle your debts over a relatively short period of time.

A debt agreement can only be entered if the debtor is insolvent, i.e. unable to pay their debts as and when they fall due.

A debt agreement can be entered if a debtor has:

  • Not been bankrupt, utilised a debt agreement or given an authority under section 188 of the Bankruptcy Act in the last 10 years;
  • An after tax income of less than $66,284.40;
  • Unsecured debts of less than $88,379.20 (unsecured debt is any debt that is not secured against an asset, e.g. property).

If you’re uncertain if you fit the above criteria, don’t hesitate to pick up the phone and call our debt consolidation consultants on 02 9798 1580, as there is always a chance you have miscalculated a bill, or you have not taken into consideration a monthly expense e.g. gym fees.

Debt Consolidation for Unsecured Debt

Some examples of unsecured debts include credit card debt and unsecured personal loans – that is, a loan that does not use an asset (like your home) for security. See a list of unsecured debts here.

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