A Debt Agreement is an arrangement whereby you can settle your debts by paying back a percentage, so in that respect, it cannot be considered to be free. And in addition, it must be administered by a Debt Agreement Administrator, as well as being regulated and monitored by a government body. Both of these parties have their own sets of costs and fees that must be taken into account when calculating your Debt Agreement payments.

The majority of the payments that you make into your Debt Agreement will be distributed to your creditors in the form of dividends. It is the responsibility of your creditors to prove how much was owed to them at the time your agreement was accepted, and each will get the same percentage return of that amount. This is the main area of difference in the amount that different people will pay into their Debt Agreement, as the more you owe, the more you will pay, and vice versa.

This is not the only amount that needs to be considered, though, as you will need a Debt Agreement Administrator to oversee the Agreement. Administrators are in business and so, naturally, they need to be paid for their services. Generally speaking, a Debt Agreement Administrator will get about 20-25% of the payments that you make as an ongoing fee to maintain your Agreement. In addition, they may also charge you fees to assess your situation, deal with your creditors in the initial stages, and to draft and lodge the proposal for you. It is in this initial stage that the fees charged by different companies will vary the most so, when calling around, be sure to find out exactly what you will be charged for each step of the process and, most importantly, how long each step will take.

The final charge that you need to consider is that of the government body that regulates Debt Agreements: AFSA. They also receive a percentage of your payments, which is currently
7% . In addition, they charge a fee of $200 to lodge your Debt Agreement Proposal with them, which will usually either be paid up front by yourself.

So if you are thinking of proposing a Debt Agreement to your creditors, it is safe to assume that you will end up paying close to the amount that you currently owe, as this will incorporate the AFSA charges, Debt Agreement Administrator fees, and a nice healthy return to your creditors. If you cannot afford to pay anything towards your debts, you may need to consider Bankruptcy. Here at the Debt Agreement Advice Centre we are equipped to help you with both of these options, so call us today on 1800 653 485 to find out which would be the best solution for your unmanageable debt.