A debt solution that is a good alternative to bankruptcy is a Debt Agreement. A Debt Agreement is an agreement established between yourself and your creditors to settle your unsecured debts. A Debt Agreement means that, should you follow the terms of the arrangement and make the agreed payments in a timely manner, protection of your assets will be secured and creditors will be unable to force you into bankruptcy.

In order to enter into a Debt Agreement, you need to meet the eligibility criteria. Firstly, you need to be insolvent. Being insolvent means that you are “unable to pay your debts as and when they fall due”.

The second requirement that you need to meet regards your annual income, total unsecured debt amount, and equity in any of your assets; they all need to fall below certain thresholds.

While these may change from time to time, the current statutory thresholds (at the time of writing) stands at:

Income (before tax) – $113,304
Income (after tax) – $81,121.95
Unsecured debt/equity in assets – $108,162.00

You also cannot have been bankrupt or had a Debt Agreement in the last 10 years, and you will be required to pay a Debt Agreement lodgement fee.

In addition, in order for your Debt Agreement to be made official, the majority of your creditors need to agree to your proposed arrangement. To increase the chances that your creditors will accept the agreement, it is important to propose a payment amount that will keep them happy, but which is also realistic for you to pay and maintain over a certain period of time.

The Debt Agreement Advice Centre can offer you a range of debt solutions to help you with your financial troubles, including Debt Agreements. If you would like more information about Debt Agreements, then please call our friendly and experienced debt consultants on 1800 653 485 for free 24/7 advice.