DEBT AGREEMENTS

12 successive interest rate rises left Rachel and Steve wondering what they did wrong! Buying a home was meant to be the key to taking care of their family but the last couple of years things seem to have been getting worse. Since they first took out the mortgage the repayments have gone up $154 per week!!! They've had to use their credit cards for emergencies as they came up (the engine blowing up, the hot water system dying etc). Now they've let the credit cards fall behind so they could pay the mortgage. There were a lot of sleepless nights, the debt collectors wouldn't stop calling and they didn't know what they were going to do. Rachel and Steve applied to refinance their mortgage but were rejected due to defaults on their credit history.

Debt Helpline assisted with a Debt Agreement. After looking at their situation their Consultant identified that they could repay $141.00 per week after their mortgage and taking care of their family. Debt Helpline put together an agreement with all of their unsecured creditors over 3 years, under which they repay about $2000 less then they owe and it's interest free!!! The knowledge that their credit cards are taken care of and they are three years away from only having their mortgage to pay has given them their peace of mind back.

A Debt Agreement (DA) is all about providing a solution to people who are experiencing difficulty in meeting their financial commitments and are unable to take out a debt consolidation loan (due to bad credit or not meeting the banks criteria). If you are really struggling with your debts and don't want to go bankrupt a Debt Agreement might provide a viable alternative for you.

Debt Agreement Administrator (e.g. Debt Helpline) will analyze your financial situation and identify how much you can actually AFFORD to regularly repay. Using the amount you can repay the administrator will design a legally binding agreement, your creditors will generally accept less than your currently owe and it's interest free, . The agreement will be put forward to the government (ITSA) to be accepted for processing and to your creditors for voting. Most people wish to honour their commitments to their creditors, however they may have fallen on hard times, or their situation may have changed and they find it difficult to make payments. By doing a Debt Agreement people can maintain their dignity and honour their obligation to the best of their abilities. DA's are covered by Government Legislation and all stages of the process are overseen by the Government.

DA Summary

Consolidates Your Debts into the one combined repayment. These debts need to be unsecured debts, e.g. Credit Cards, Personal Loans, Overdrawn Bank Accounts, Store Cards, Repossessed Cars, Old Electricity/Gas Accounts (previous addresses), Disconnected Telephone/Mobile Accounts, School Fees, Childcare Fees, Old Foxtel Accounts etc.
One Easy, Affordable Repayment (weekly or fortnightly). The legislation allows for you to make one repayment that covers the new consolidated debt repayment.
Debt Collector Harassment Stops after the government (ITSA) accepts your agreement for processing, Any legal action is stopped and your creditors can no longer contact you.
Interest Free. When your Agreement is accepted for processing, you will be charged no further interest on your debts and there is NO INTEREST charged on the consolidated debt either.
Debts are Gone, Permanently. Once your DA has been fully paid out, this represents full and final satisfaction for creditors included in the agreement.

DA Criteria

Of course, there are a number of criteria put in place by the government. In the main they are:

You cannot have a take-home pay (after tax income) of more than approximately $1,154.45 per week,
unsecured debts cannot exceed $80,262.00 - approximately,
You cannot have assets of more than approximately $80,262.00 and
You cannot have been an undischarged bankrupt nor had a DA in place over the last 10 years.

Debt Helpline Debt Agreement Process

Debt Helpline is one of the largest Debt Agreement administrators in Australia. Thousands of Australians have been assisted by Debt Helpline and are well on their way to being debt free.

The Steps to being Debt Free:

Contact Debt Helpline, with rough balances of your debts for a free consultation. The total of your unsecured debts will need to be $10,000 or more. We need to know ALL of your Debts and Assets. If we don't we are unable to represent you to the best of our ability and your agreement may be rejected.
We can identify what options are available for you. If a Debt Agreement is the best option for you we can give you an accurate idea of what the repayments would be right away and start the process
We will ask you to obtain a statement for each of your debts (including rentals) and some other important documents such as payslips (the documents will change depending on your circumstances, ask your Consultant)
After putting together your case using your documents, we will put forward a DA proposal to your creditors. While there is no guarantee that they will accept it, bear in mind that most DA proposals are accepted. With those that are rejected, we then put forward a second proposal after working through the objections raised by those creditors who said no to the first proposal.

Important points

The fact that you enter into a DA will appear on your credit report for 7 years. This may make it difficult to obtain finance. Once you have finalized your agreement it will be updated to show you have honoured your obligation to your creditors.
There are no penalties for paying out your agreement early should your circumstances change.
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