If you have recently applied for a debt consolidation loan but were refused, there may be several reasons for this:

  • firstly, you have a poor credit record or payment history?
  • secondly, you don’t have any assets which could be pledged to secure the  loan?

If you were refused on the basis of having a poor credit record or poor payment history and you have several debts which need to be managed, then you have 2 options to consider. We will help you better understand these 2 options:

  • informal creditor arrangement; or a
  • formal creditors arrangement.

Informal Arrangement

An informal arrangement can be advantageous if you only have 2 or 3 creditors.  If you have more than 3 creditors, getting all of them to agree can be problematic. Click here to view our tips when trying to negotiate an informal arrangement with your creditors.

Formal Arrangement

A formal arrangement is most appropriate for people who can’t repay their debts (i.e they are insolvent).

If you are insolvent you basically have three options:

  1. Debt Agreement;
  2. Personal Insolvency Agreement
  3. Bankruptcy

What are the differences between informal –v- formal creditor arrangements?

Understanding the differences between informal and formal creditor arrangements is critical. Most people can set up informal arrangements themselves, whereas formal creditor arrangements are usually set up by a licenced insolvency practitioner. To better understand the differences between informal –v- formal creditor arrangements please view our comparison table by clicking here.
You can get more information about your options, by calling our friendly personal debt advisors  on 1800 676 598.