A Debt Agreement is an option for those who are looking for a way to get out of debt without restricting their flexibility and freedom like other options such as Bankruptcy.

It means that you will be less stressed about your debts because you have formalised an agreement with your creditors. It will provide financial structure and help you see the light at the end of the tunnel.

Most Debt Agreements last between 3 and 5 years in which you agree to pay a proposed sum to your creditors during that time. This is why it is important that when you enter into a Debt Agreement that your repayment plan is sustainable.

Another reason why you should consider entering into a Debt Agreement is because it is less restrictive than your other options. For example, in a Debt Agreement, you are free to travel overseas without having to obtain permission from your Trustee if you go bankrupt.

In addition, under a Debt Agreement, you are allowed to keep your car if you own it outright and disclose its value in your Debt Agreement proposal. In other debt solutions, like Bankruptcy, you will not be allowed to keep your car if it is worth over $7,700.

Similarly, if your house has equity in it, then your house will be protected and your unsecured creditors will be unable to take any debt recovery action against you. However, you must disclose the details of your house in your Debt Agreement Proposal, follow all the obligations outlined in the proposal and keep your mortgage repayments up to date.

If you are still wondering why you should enter into a Debt Agreement or would like to find out more information, please contact us on 1800 653 485.

The best way to avoid bankruptcy is to be financially responsible. Here are some tips on how to ensure that you stay on top of your finances and are always in control.

1. Create a budget

Creating a budget is a simple yet effective way to avoid bankruptcy. A budget will help make sure that you are keeping track of your income and how much money you are spending. It will give you valuable insight into your current financial status and help you make informed decisions about money which can prevent you spending money that you don’t have.

A strict budget may help you avoid bankruptcy because it will help you reduce your debts. A budget should take into account all bills and their payment dates so you don’t get further in debt with late payment fees. This routine will in the long run help you save money and gain control of your finances.

If you want to treat yourself once in a while and indulge yourself, this needs to be factored into your budget. In fact, budgeting for these rewards will make you enjoy them more as well!

2. Emergency savings

One of the best ways to avoid bankruptcy is to set aside a percentage of your savings that you do not touch unless it is an emergency. This way, if an emergency does occur such as sudden injury in the family which will result in a loss of income in the household, or a medical emergency, you will have a certain amount of money set aside to use. This will prevent you from relying on credit cards to help you through these types of emergencies.

How much your emergency savings account should hold depends entirely on you. As a minimum we recommend you have at least three months of living expenses in your account.

Debt Agreement Advice Centre are expert debt consultants who can help you avoid bankruptcy. If you find that your debts are piling up, we can provide you with one of our debt relief solutions such as a Debt Agreement. We will assess your situation to determine whether a Debt Agreement can help you. If so, then our Debt Agreement consultants will take you through the process step by step to help you avoid bankruptcy and get out of debt. Call us on 1800 653 485 for a free initial consultation.