PERSONAL DEBT AGREEMENT
One of the most common personal debt solutions Australians choose in order to avoid bankruptcy is entering into a Debt Agreement.
A debt agreement is a legally binding agreement made with one’s creditors which, when approved, can negotiate the amount of outstanding debt to be repaid and the time allowed for completion. In many cases this will be less than the total amount you currently owe and any difference will be written off.
Under a debt agreement, the interest on your debts is also frozen at the time your agreement is accepted by your creditors. Any payments you are able to make are divided up between your creditors after our professional fees have been paid.
Once your debt agreement has been approved by your creditors, it will protect you against any further legal action which they may have been entitled to take against you, which may have resulted in your bankruptcy.
To be eligible for a debt agreement, you must:
- Be considered insolvent (unable to pay your debts as and when they fall due);
- Have unsecured debts less than < $118,063.40; and
- Have equity in assets less than < $236,126.80; and
Be regularly employed but annual income is less than < $88,547.55 (after tax) or approximately <$119,138 (before tax for Australian residents).
For more information on Debt Agreements, or to see how ISA can help you, give us a call on our 24/7 toll-free hotline. Contact 1800 003 883.
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