If you have been searching for a debt repayment solution, you have probably heard of informal and formal creditor arrangements. Before you enter into any arrangement with your creditors (whether it be informal or formal) you need to understand the differences between the two (2) options.
To help explain the differences we provide the following information in a table format:

Informal arrangement

Formal arrangement

Is it appropriate if I am insolvent?

no

yes

Do all creditors need to unanimously agree for it to become binding on all?

yes

no

Is interest frozen on the debts?

no

yes

Can I make one single payment to all creditors?

no

yes

Is any unaffordable debt written off at the end of the arrangement plan?

no

yes

Are there any long term negative consequences?

no

yes*

Will it stop my creditors from taking legal action to recover debts?

no

yes

Will it stop my creditors from calling & harassing me?

no

yes

Will it force the unwilling creditors to agree to an affordable arrangement plan?

no

yes

Will it place any restrictions on my life style and earnings

no

no

How long will the arrangements run for?

each one is different

usually between 3-5 years

Will my house and car be protected from creditor action?

no

Yes*

 
If any of the above is not clear, please call our friendly and professional debt consultants on our toll free advice line 1800 462 767.