Informal Debt Agreement: Debtstroyer Agreement
An Informal Debt Agreement is a way to get out of debt without the consequences of a formal bankruptcy. It allows you to renegotiate the terms of your debt to settle on a new repayment arrangement – one which you can afford.
At Debt Rescue, we speak to hundreds of Aussies each week who are exhausted and confused by their debts. When it comes to providing them with options for debt relief, we noticed there were very limited options for people who wanted to protect their credit file, or if they didn’t qualify for a Part 9 Debt Agreement. We strive to provide a holistic approach to debt relief and saw we could help these people with a Debtstroyer Agreement.
What is a Debtstroyer Agreement?
A Debtstroyer Agreement is Debt Rescue’s very own brand of Informal Debt Agreement. The Debtstroyer Team is a group of highly trained professionals including Accountants and Debt Negotiators. They will negotiate the terms of your Debtstroyer Agreement to suit your circumstances while striving to appease your creditors. A Debtstroyer Agreement is your secret weapon against bad debt.
The difference between a Part 9 Debt Agreement and an Informal Debt Agreement
An Informal Debt Agreement is much like a Part 9 Debt Agreement in that it allows you to reduce your debt, freeze your interest and make your repayments in peace. However, there are a few key differences which make an Informal Debt Agreement the prefered option for those who are eligible.
It won’t impact your credit file
Unlike a Part 9 Debt Agreement, an Informal Agreements won’t be noted on your credit file. The reason for this is because an Informal Debt Agreement is negotiated privately with your creditors and isn’t legislated by AFSA. It is still a legally binding contract which you and your creditors must adhere to.
If you are in arrears on your debts prior to entering an Informal Agreement, the wheels might already be in motion to have a default added to your credit file. However, entering an Informal Debt Agreement will help you better manage your debts and avoid any further defaults being added.
Not written into the Bankruptcy Act
An Informal Debt Agreement is not a form of Bankruptcy, so your name won’t be noted on the NPII, nor will it impact your employment.
It doesn’t have limiting criteria
Part 9 Debt Agreements are legislated by the Australian Government so there are set limits you must adhere to before you apply. Those limits do not apply for an Informal Debt Agreement, making it a great solution if you have a high income, equity in your home or excessive amounts of debt.
The benefits of an Informal Debt Agreement
An Informal Debt Agreement can be your secret weapon against bad debt. As soon as you enter an Informal Debt Agreement your creditors must cease any recovery action so you won’t receive any more harassing phone calls. The professional Debt Negotiators at Debtstroyer can work to reduce your debt through a number of ways. These include:
- Refinancing your loan
- Consolidating your debt into your mortgage
- Freezing interest and fees
- Settling your debt by paying a reduced amount in a lump sum payment
- Settling your debt by paying a reduced amount over an agreed period of time
- A number of these strategies combined
Informal Debt Agreements are highly personalised solutions for people struggling with bad debt. It allows you to tackle your debt head-on while having little impact in the other areas of your life.
Is an Informal Debt Agreement right for you?
Because an Informal Debt Agreement operates outside the legislation of 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 Informal Debt Agreement. That’s why it’s imperative you have experienced, professional Debt Negotiators, like the team at Debtstroyer.
Also, if you break the terms of your Informal Debt Agreement, such as consistently missing repayments without explanation, your creditors can reinstate your original debts and start recovery proceedings. Remember, an Informal Debt Agreement is legally binding. Your creditors cannot pursue you for any additional funds, and you must stick to the agreed repayments.
Am I Eligible for an Informal Debt Agreement?
To enter an Informal Debt Agreement, you must be able to prove severe financial hardship. If you have simply fallen behind in your debt repayments or have taken on too much credit, your creditors will vote no to an Informal Debt Agreement and suggest you enter a Part 9. However, if you have extenuating circumstances for your debt, you may be eligible for an Informal Debt Agreement. Some examples of eligibility include severe financial hardship caused by:
- sudden and unexpected illness or injury
- an unexpected and temporary change in employment
- an unexpected change in living arrangements, such as separation or divorce
You are also eligible for an Informal Debt Agreement if you fall outside the criteria for a Part 9 Debt Agreement. For instance:
- You earn more than $85,012.20 (after tax)
- Your debts exceed $113,349.60
- You have more than $113,349.60 in asset value
- A formal act of bankruptcy will impact your profession (such as a Real Estate Agent)
How to enter an Informal Debt Agreement
If you think an Informal Debt Agreement is the best course of action for you, contact Debt Rescue today. Our experienced Case Managers can determine your eligibility and hand you over to the Debtstroyer Team. The experienced Debt Negotiators will liaise with your creditors to reach a mutually beneficial arrangement. Give us a call today on 1800 00 3328.