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Debt Solutions Quick Guide: What Are Your Options?

Debt Solutions Quick Guide: What Are Your Options?

When struggling with debt, you don’t have to do it alone. Did you know there are a variety of debt solutions available? Read on to discover more.

Australia’s household debt is at a record high, with the majority of this debt coming from poor financial decisions relating to housing, student, and vehicle loans.

If your financial situation is causing you stress, and preventing you from moving forward in your life, you have options. Discover three Debt Solutions that can help you escape from the endless cycle of debt.

Debt Solutions Quick Guide:

Debt Agreements             

First up on our list of debt solutions? The concept of debt agreements, which you may also have heard referred to as “Part 9.” Debt agreements are not a loan of any kind. Instead, you pay off only a percentage of your debts as outlined in a specific repayment plan — without having to declare bankruptcy.

When you make these payments, you don’t pay your creditors. Instead, you pay a debt agreement administrator. Once you’ve paid off the agreed-upon percentage, the rest of your debt is ineligible to be claimed by your creditors. Your creditors will likely be willing to accept a Debt Agreement, as it often means they’ll end up making more money than they would if you were forced to declare bankruptcy.

Personal Insolvency Agreements

If you’re uncomfortable with the idea of Debt Agreements, Personal Insolvency Agreements (also called Part 10) are another possible solution. As with Debt Agreements, this option also allows you to avoid declaring bankruptcy. During this process, a trustee is appointed to take over your property. This trustee (who will collect a fee) offers to repay your creditors either all of the debt you owe or a specific percentage of it.
Additionally, there aren’t any income limits associated with eligibility for Personal Insolvency Agreements. So, if you earn a high salary and have still managed to accumulate quite a bit of debt, this could be the perfect solution for you.


If neither one of the above options is suitable for your current situation, it may be wise to declare bankruptcy. Keep in mind that this should be your final options, as there are heavy penalties associated with bankruptcy. You may lose your home, your assets, and even face jail time. Additionally, your bankruptcy will stay on your credit history for five years. It’s not a decision you should take lightly.

A bankruptcy will cancel your credit card debts, any unsecured personal loans you’ve taken out, and even GST debts, among others. However, you’ll still be required to repay your secured debts, such as your mortgage. Additionally, you’ll still have to pay any court penalties, fines, or child support. Since car loans are not cancelled by bankruptcy, you likely won’t lose your vehicle — provided you keep making the required payments.

Learn More About These Debt Solutions 

Debt can feel overwhelming, but this post proves there is a light at the end of the tunnel. It’s time to take the first step towards getting out of debt by calling our Free Debt Helpline.
For additional money management insights, be sure to check out the wealth of knowledge available on our blog.