Debt Agreement

Debt Agreement Key Features:

  • All interest is frozen on your unsecured debts;
  • One regular payment (weekly, fortnightly, or monthly);
  • Maximum term of 5 years (all unsecured debts legally discharged);
  • You can expect a proportion of the debt to be legally written off;
  • Beyond Debt provides a one-stop solution.


Debt Agreement Summary
Debt Agreements use government legislation to lump together all your unsecured debts into the one arrangement.  You make a regular repayment to an “administrator.”  The regular repayment is determined by what you can afford to repay, with the remainder legally written off.  Debt Agreements have existed since 1996 but are increasing in popularity.

Who are debt agreements for?

If you can’t afford to repay your debts as and when they fall due, a Debt Agreement may be a good option for you. A Debt Agreement allows you and your creditors to come to a compromise. A Debt Agreement will allow you to repay less than the full amount for the debt.  A Debt Agreement is also legally binding, meaning that your creditors can’t change their minds.

What is a Debt Agreement?

A Debt Agreements is not just another loan. A Debt Agreement is a lasting solution to your financial problems.   Most people choose to use a “Debt Agreement Administrator” to process and administer the agreement. Beyond Debt (DCS Group Aust Pty Ltd) manages thousands of agreements. After your agreement is legally binding (creditors can’t change their mind), you will only deal with Beyond Debt.  Your creditors are prohibited from writting you letters or calling you.

There are a few criteria that must be met in order to qualify for a Debt Agreement:

  • Can not have been bankrupt in the last 10 years;
  • Can not earn more than $1,302.78/week approximately after tax per week;
  • Can not have assets of more than $90,326.60 (individually).
  • Can not have unsecured debts of more than $90,326.60 (individually).

Consequences:

  • A debtor who proposes a Debt Agreement commits an act of bankruptcy (however, the debtor is not bankrupt). A creditor can use this to apply to court to make the debtor bankrupt, if the proposal is not accepted by creditors.
  • The debtor’s name and other details appear on the National Personal Insolvency Index (NPII), a permanent public record, for the proposal submitted and any Debt Agreement entered into.
  • The ability of the debtor to obtain further credit is affected. Details may also appear on a credit reporting organisation’s records for up to seven years.
  • During the voting period, creditors cannot take debt recovery action or enforce a remedy against the debtor or the debtor’s property, and must suspend deductions by garnishee on debtor’s income.
  • All unsecured creditors are bound by the Debt Agreement, and are paid in proportion to the debts owed to them.
  • The debtor is released from most unsecured debts when they complete all their obligations and payments.
  • Secured creditors may seize and sell any assets (eg a house) which the debtor has offered as security for credit, if the debtor is in default.
  • Creditors cannot take any action against the debtor or property of the debtor to collect their debts.
  • The agreement does not release another person from a debt jointly owed with the debtor.
  • A debtor must disclose that s/he is a party to a Debt Agreement if incurring debt or obtaining goods and services in excess of the threshhold.
  • If trading under a business name or assumed name (whether alone or in partnership) the Debt Agreement must be disclosed to all people dealing with the business.
  • If operating a sole trader business while in a Debt Agreement, the debtor must include their full name in the business name; e.g. John Smith trading as Smith’s Shop.

What is the debt agreement process?

  • Beyond Debt conducts a preliminary assessment of your financial situation over the phone;
  • You formally engage us to act on your behalf;
  • Beyond Debt conducts credit checks, property valuations, and contacts all of your creditors;
  • A Debt Agreement is sent to all creditors to accept or reject. Most agreements are accepted;
  • Once the debt agreement has been accepted it becomes legally binding;
  • Make your one regular payment and get on with the rest of your life.

Individuals who do not meet the criteria above may still apply for a personal insolvency agreement. Alternately, see the Debt Solutions page for other options. You must determine whether the information is appropriate in terms of your particular circumstances.

If you think a Debt Agreement is a solution for you, contact Beyond Debt today.