Debtstroyer Agreement FAQ
What is a Debtstroyer Agreement?
A Debtstroyer Agreement is a debt relief solution which can help reduce your minimum repayment amount, pause your interest and give you more time to pay off your debts in one, easy-to-manage repayment – all without having a lasting impact on your credit rating.
Each Debtstroyer Agreement is tailored to suit your individual needs and is based on your personal financial situation. It could allow you to repay a reduced debt amount over a set period of time, or you could offer to settle your debts in one lump sum payment. Debtstroyer Agreements are negotiated privately with your creditors so the agreement itself won’t leave a mark on your credit file.
Is a Debtstroyer Agreement right for you?
Because a Debtstroyer Agreement operates separately to the Bankruptcy Act, there are a few things you need to be wary of. All of your creditors must be on board and agree to your proposal for your Debtstroyer Agreement. It’s imperative you have experienced, professional Debt Negotiators, like the team at Debtstroyer. You shouldn’t break the terms of your Debtstroyer Agreement by consistently missing repayments without explanation. Your creditors can reinstate your original debts and start recovery proceedings. Remember, a Debtstroyer Agreement is legally binding. Your creditors cannot pursue you for any additional funds, but you must stick to the agreed repayments.
How do I enter a Debtstroyer Agreement?
Entering a Debstroyer Agreement is simple. We will look at your financial situation and if a Debtstroyer Agreement is right for you, we will work with your creditors to come up with a realistic, achievable and sustainable repayment plan. The repayment amount will be calculated based on your income, cost of living, debts and budget. Often, this can mean you are only repaying a percentage of every dollar you owe with all future interest paused so you can repay your debt quickly and stress free.
What types of Debtstroyer Agreements are there?
- Long Term Informal Agreement: This arrangement reduces the minimum repayments, pauses or significantly reduces interest, has no 'typical' term but may be several years and in many cases even reduces the principal debt amount
- Moratorium: A short-term arrangement which pauses or significantly reduces repayments and interest over a period of up to 12 months
- Debt Settlement: Is designed to waiver, reduce debt or negotiate a single lump sum payment to settle outstanding debts.
- Agribusiness: Is a specific agreement to manage individuals caught up in failed agribusiness loan schemes. This could be a single lump-sum payment, a moratorium or long term payment arrangement, depending on the individual’s financial capacity.
- Loan Renegotiation: is a negotiation of current loan terms and conditions to reduce their minimum loan repayments or interest rate
How long does a Debtstroyer Agreement last for?
As each Debtstroyer Agreement is tailored to the client, it is hard to know exactly how long the process will take. In order to ensure your Case Manager can start negotiations as soon as possible, it is important to provide any documents, forms and payments to your Case Manager as soon as possible.
A Debtstroyer Agreement can last anywhere from a number of weeks (if a lump sum repayment is agreed upon) to a number of years.
Can I enter a Debtstroyer Agreement while on Centrelink payments?
Yes. You can enter into a Debtstroyer Agreement while you are on Centrelink benefits.
Can I enter a Debtstroyer Agreement if I own a property?
Yes. If you own a property, we can negotiate your unsecured debts and consolidate them into your mortgage through a home loan refinance.
Will a Debtstroyer Agreement affect my credit file?
No. Your credit file will not be affected by a Debtstroyer Agreement. This is because an Informal Agreement is negotiated privately with your creditors and isn’t legislated under the Bankruptcy Act. It is still a legally binding contract which you and your creditors must adhere to. If your debts are in arrears prior to entering a Debtstroyer Agreement, you may already have a default on your credit file. However, entering a Debtstroyer Agreement will help you manage your debts and avoid any further defaults. Should you not meet the terms of the Debtstroyer Agreement, your creditors will have the right to recommence recovery proceedings, which could lead to them listing defaults and judgements on your credit file.
The Debtstroyer Agreement Process
What is the difference between a Part 9 Debt Agreement and a Debtstroyer Agreement?
A debtstroyer Agreement is similar to a Part 9 Debt Agreement. It allows you to reduce your debt, pause your interest and make repayments in peace. Key differences include:
- It won't impact your credit file,
- Not written into the Bankruptcy Act,
- It doesn't have limiting criteria
What are the benefits of a Debtstroyer Agreement?
- It will provide you with a viable alternative to bankruptcy and avoid the limitations that go along with bankruptcy.
- Debtstroyer negotiates with your creditors on your behalf to reach the best possible outcome for you.
- You can choose which debts are included in your agreement and you don’t have to include them all.
- For ongoing arrangements, you only need to make one easy regular payment and Debtstroyer will administer all of the collections and payments of the Debtstroyer Agreement on your behalf.
- For debt settlements, you only need to make a one-off lump sum payment to satisfy your debts in full.
- Calls and harassment from creditors cease once they recognise we are working with you to find a solution
- If you act early your credit file may not be significantly affected
- In almost all circumstances interest is paused or substantially reduced on the debt you owe.
- It will allow you to significantly reduce the total amount you would otherwise have to repay to your creditors.
- The discipline of having one realistic repayment makes it easier to budget your money, allowing you to still afford essential household expenses.
- By having an administrator of your debts, your creditors are more likely to continue on with negotiations and reach a final settlement.
- Debtstroyer continues to communicate and negotiate with your creditors throughout the term of the agreement.
- An administrator will continue to work with you to smooth out your circumstances or possibly help pay your agreement out early.
- Flexibility when your financial situation improves.
What are the consequences of a Debtstroyer Agreement?
- If you don’t meet the terms of your Debtstroyer Agreement or make your payments in full and on time, the creditors are within their rights to recommence collection proceedings, legal action or bankruptcy.
- Not all creditors may agree to a negotiated arrangement and therefore may not be included in the Debtstroyer Agreement.
Debts Under a Debtstroyer Agreement
What debts can be included in a Debtstroyer Agreement?
You can include any debt you owe in a Debtstroyer Agreement. Typically credit cards, personal loans, utility bills and tax debts are included in a Debtstroyer Agreement. Debtstroyer Agreements can also renegotiate your unsecured debts to fit in with a mortgage refinance or debt consolidation loan.
Can joint debts be included in a Debtstroyer Agreement?
You can include joint debts in a Debtstroyer Agreement. However, the co-borrower will need to be party to the Debtstroyer Agreement.
Will a debtstroyer agreement affect my employment?
Certainly not. These arrangements don’t carry the legal weight of bankruptcy, so your employment shouldn’t be affected in the slightest.
How do I make repayments?
You will pay one regular repayment into an audited trust account. From there, we will distribute the appropriate funds to your creditors according to the terms of your Debtstroyer Agreement.
Can I include business debt in a Debtstroyer Agreement?
Yes. If you are a sole trader and struggling to maintain payments on business debts, a Debtstroyer Agreement may help.
Can I include tax debts in a Debtstroyer Agreement?
Yes. We may be able to negotiate your tax debts privately with the Australian Taxation Office (ATO) and reach a more affordable repayment arrangement.
What happens if a creditor doesn’t accept the Agreement?
You will need to maintain the regular minimum repayments to that creditor.