The Australian Lending Centre has over 15 years of experience helping Australians work through difficult financial times using debt consolidation strategies. We've also helped many people avoid declaring for bankruptcy. We understand how easily your financial situation can change and that your debts can become unmanageable. Our experience has shown us that each person's situation is different and often a tailored debt consolidation solution is required.
What is a debt agreement? How can it help me avoid bankruptcy and consolidate debt?
A debt agreement is a debt management plan that can save clients on the brink of bankruptcy and stop the constant barrage of debt collectors, not to mention the growing interest charges and penalties that often arise when debts are not paid.
A debt agreement is an arrangement to settle debts over time instead of declaring for bankruptcy. One of the first steps is to present your creditors with a proposal. The Australian Lending Centre's debt consolidation experts can help negotiate and prepare a proposal so you can settle your debts with a payment plan that you can afford over a timeframe that suits you.
Debt consolidation - how is a debt agreement paid?
Essentially, your debts are consolidated into one affordable repayment and we distribute this payment to your creditors over time until the debts are settled in full.
What happens if creditors accept the debt agreement proposal?
Should creditors accept your proposal, the accruing interest on your debt is frozen and creditors will not be able to contact you for debt collection or take legal action against you. When you enter a debt agreement, all the interest, service fees, account keeping fees and late payment fees STOP. A debt agreement is therefore a much better alternative to bankruptcy.
Click Here for Case Studies - Debt Management using a Debt Agreement
Traffic fines, child support, HECS/HELP and Centrelink debts incurred by fraud are excluded from a debt agreement.
When would a creditor accept a proposal for a debt agreement?
Creditors will only accept your proposal if they consider it reasonable. For a debt agreement to be accepted, a majority in number and value of debt must accept it. With our expertise in managing debts, we can help you negotiate a settlement and prepare your proposal in a way that maximises your chance of having it accepted by your creditors.
Is there a risk of loosing my home in a debt agreement as with bankruptcy?
Unlike bankruptcy, under a debt agreement there is no vesting of property and you are allowed to keep all of your possessions.
What happens to my credit file if I enter a debt agreement?
Once you enter into a debt agreement, your credit file will reflect this. This information will appear for seven years. Once you finish paying your debt agreement, your credit file will reflect that you have paid it - showing lenders and creditors that you paid your debt as opposed to using bankruptcy to protect yourself.
What happens if my circumstances change and I can't afford to pay my debt agreement?
If you can't afford to pay your debt agreement, it could be terminated. This means the debt agreement is cancelled, the debts are revived and the creditors are able to resume collection of the debts. In addition, interest, fees and charges that the creditors forgo at the start of the agreement may be added to the debts. For this reason, our debt consolidation consultants will help you put together an accurate household budget that will help you with debt management.
You may change or vary your debt agreement, if your creditors agree to the change. A variation to a debt agreement will only be accepted if a majority of creditors, in number and value, agree to the changes. With our expertise in debt agreements we can help you change your proposal when necessary and can provide advice on effective debt management.
Can I pay off my debt agreement earlier?
If you are in a position to pay off the debt agreement sooner, you should consider doing so. By paying the debt agreement sooner, you will save time. There is no financial penalty for paying the debt agreement sooner.
The Australian Lending Centre offers the following debt management strategies:
