What Is a Debt Agreement in Australia and Should You Consider One?

What Is a Debt Agreement in Australia and Should You Consider One?

If you're drowning in debt, a debt agreement might sound like a lifeline. But is it the right move in 2025? Let’s break it down.

What Is a Debt Agreement?

A debt agreement is a legally binding arrangement between you and your creditors to repay a percentage of your debt over time — typically 3 to 5 years.

Who Can Apply?

  • Over 18 and insolvent (can’t pay debts when due)
  • Unsecured debts under $120,000 (as of 2025)
  • Assets and income under threshold set by AFSA

Pros

  • Stop interest and legal action
  • Consolidate into one regular payment
  • Option to avoid full bankruptcy

Cons

  • Serious impact on credit score (stays for 5–7 years)
  • Can affect rental or job applications
  • Not suitable for secured debts (e.g., mortgages)

Important Notes

  • You must use a registered debt agreement administrator
  • It’s listed on the National Personal Insolvency Index (NPII)
  • Missing payments can lead to termination

Final Tip: Always get advice from a licensed financial counsellor before entering any agreement.

Disclaimer: This article provides general information only. Seek personalised advice from a licensed professional or AFSA-approved counsellor.

Debt agreement consultation in Australia 2025

Comments

Post a Comment

Popular posts from this blog

How to Improve Your Credit Score in 90 Days

Image
How to Improve Your Credit Score in 90 Days Your credit score isn't set in stone. With the right strategy and commitment, you can significantly boost your score in just 90 days. Whether you're planning to apply for a loan, a credit card, or just want better financial health—this guide is for you. Day 1–7: Know Where You Stand Get a Free Credit Report: Start by obtaining your credit report from Equifax, Experian, or illion. Check for Errors: Look for incorrect addresses, unpaid debts that you've cleared, or duplicate listings. Dispute Inaccuracies: File a dispute with the credit agency to correct any errors. Day 8–30: Build Better Habits Pay Bills on Time: Payment history has the biggest impact on your credit score. Set Up Direct Debit: Automate payments for credit cards and utilities to avoid missing due dates. Reduce Credit Utilisation: Try to use less than 30% of your credit limit. Day 31–60: Reorganise Your Finances Pay Down Exis...
Read more

Best Personal Loan Options in Australia 2025

Image
Best Personal Loan Options in Australia 2025 Looking for the best personal loan in Australia this year? Whether you're consolidating debt, funding a major purchase, or just need extra cash flow, choosing the right loan can save you thousands of dollars in interest and fees. In this post, we break down the top personal loan options available in Australia for 2025. 1. NAB Personal Loan Interest Rate: From 6.99% p.a. (fixed) Loan Amount: $5,000 – $55,000 Highlights: No early repayment fees, same-day approval in some cases. 2. CommBank Fixed Rate Personal Loan Interest Rate: From 7.50% p.a. (fixed) Loan Amount: $4,000 – $50,000 Highlights: Customizable loan terms, redraw available. 3. Harmoney Peer-to-Peer Loan Interest Rate: From 6.29% p.a. (risk-based) Loan Amount: $2,000 – $70,000 Highlights: 100% online process, credit score friendly. 4. Wisr Personal Loan Interest Rate: From 7.49% p.a. Loan Amount: $5,000 – $64,000 Highlights: Fast approval, suppo...
Read more

How to Pay Off Credit Card Debt Fast Without Hurting Your Credit Score

Image
  Introduction Credit card debt can feel like a heavy burden, constantly hovering over your financial well-being. The high interest rates can make it seem impossible to get ahead, and the fear of damaging your credit score often holds people back from taking decisive action. But what if you could aggressively tackle your credit card debt without risking the very financial future you're trying to build? You're not alone in facing this challenge. Millions of people struggle with credit card debt, often feeling trapped by the cycle of minimum payments. The good news is that with the right strategies, you can significantly accelerate your debt payoff journey and emerge with a stronger financial foundation, including a healthy credit score . This comprehensive guide will walk you through practical, actionable strategies to pay off your credit card debt quickly and efficiently, all while safeguarding and even boosting your credit score. You'll learn how to analyze your debt, cho...
Read more