Read our

Recent Articles

Understanding the Debt Agreement Consequences –Is it a Better Option Than Bankruptcy?

By Administrator 04 November, 2015

Are you struggling to repay your debts, but want to avoid filing for bankruptcy?At Debt Free Australia, wecan offer an alternative solution to mending your debt problems: through a Debt Agreement.

A Debt Agreement is a legal alternative to bankruptcy in which you arrange to pay a certain amount back to your unsecured creditors over a set period of time (generally 3 to 5 years).

Althoughentering into a Debt Agreement is an effective way to help resolve your debt problems and avoid the harsh repercussions of bankruptcy, it is important to be aware of the consequences associated with it.

Debt Agreement consequencesinclude:

  • A listing of the Debt Agreement on your credit file for a minimum of 5 years (ifthe agreement runs for longer than 5 years, the listing will remain until it is completed).
  • Your name will be listed on the National Personal Insolvency Index (NPII) which is maintained by AFSA. This NPII is accessible by anyone upon paying a fee.

These consequences of aDebt Agreement areunavoidable, however, it is important to also look at the benefits in proposing this agreement, particularly when comparing it to bankruptcy – a far worse off scenario.

Some benefits include:

  • The interest on your unsecured debt will be frozen
  • You will not be restricted from travelling overseas
  • It does not require you to sell any assets, such as your home, that have available equity

Get in touch today

At Debt Free Australia, we have a registered Debt Agreement Administrator who can help with your Debt Agreement.

Call one of our qualified experts today for free on 1800 676 598. We will explain how the Debt Agreement is likely to affect you and assess whether it is a suitable option for you. You will not be charged a cent until we determine that you are fully eligible and able to propose a Debt Agreement, and of course, until you decide that you wish to go ahead.