Am I eligible for a Debt Agreement?
By Administrator 24 February, 2014
A Debt Agreement is a formal debt relief solution that is available to insolvent Australians who meet certain eligibility criteria. For many people who are struggling with unmanageable debt it is an ideal way to settle their unsecured debts and protect themselves from harsh collection activity such as bankruptcy. Whether or not you are able to propose a Debt Agreement is dependent upon certain factors.
The first requirement is that you are genuinely struggling to pay your debts, ie. that you are insolvent . This simply means that you are unable to your debts and bills as they fall due, and without resorting to using your credit facilities. If you are unsure if you are insolvent or not, a reputable Debt Agreement Administrator should be able to tell you after completing a thorough debt assessment. At Debt Free Australia we offer a free debt assessment.
The second requirement is that your income, unsecured debt level, and the value of any available equity in your assets, all fall below a certain threshold. The threshold amounts are updated every six months or so and can be found here. If you exceed any of these thresholds you are not eligible for a Debt Agreement, but you would be able to look at a Personal Insolvency Agreement instead. But if you fall under all of them, you have the option of doing either (though it would make more sense for you to do a Debt Agreement).
The third requirement is more practical than legal, and that is that you quite simply are able to afford the repayments. Again, this is where a Debt Agreement Administrator is able to help you. A reputable Administrator will draw up an indepth household budget for you and ensure that your Debt Agreement repayments are affordable and sustainable, as well as being acceptable to your creditors.
If you are wondering whether a Debt Agreement is the right solution for your unmanageable debt, call one of our consultants today on today on 1800 676 598. We can help you to determine your eligibility for a Debt Agreement and advise you on all of its pros and cons so that you can make an informed decision.