If you cannot afford your existing repayments but could afford some repayment, then a debt agreement is a great option. It allows for a  permanent reduction in payments to creditors based on what you can afford.

Debt Agreement SummaryDebt agreement brochure PDF download.

  • Debt Agreements put all of your individual debts into one ‘pool’ of debt. These debts need to be unsecured debts. Unsecured debts include:
    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 Pay TV accounts, etc.)
  • You make one easy, affordable weekly, fortnightly or monthly payment that covers the Debt Agreement.
  • Legally, creditors must stop contacting you and any legal action is stopped, including bankruptcy.
  • Interest charges and penalty fees are frozen.
  • What you can’t afford to pay is potentially written off.

Debt Agreement Criteria

There are a number of criteria you need to meet to enter into a Debt Agreement.

  1. Your take home pay (after tax income) of under $1572.64 per week (or $81,777.15 annually).
  2. Your unsecured debts must not exceed $109,036.20.
  3. You must not have filed for bankruptcy or have had a Debt Agreement in place at any time over the last 10 years.
  4. Any assets you own must not be worth more than $109,036.20.


  • A debtor who proposes a debt agreement starts the act of bankruptcy. A creditor can use the debt agreement to apply to court for making the debtor bankrupt if the proposal is not accepted by the creditors.
  • Information about your debt agreement, including your name, and some other details, will be recorded on the National Personal Insolvency Index (NPII) for a limited time.  When the obligations of your debt agreement have been completed, the NPII notation will be removed, but no sooner than five years from the date the debt agreement commenced.
  • The ability of the debtor to obtain further credit is affected. Details may also appear on a credit reporting organisation’s records for five years, or until the debt agreement is completed, whichever is longer. If the debt agreement is terminated, it will be recorded for five years total or for two years after the termination, whichever is longer.
  • 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 acting as a garnishee on debtor’s income.
  • The debtor is not bankrupt.
  • All unsecured creditors are bound by the debt agreement and are paid in proportion to their debts.
  • The debtor is released from most unsecured debts when they complete all of their obligations and payments.
  • Secured creditors may seize and sell any assets (e.g. a house) that the debtor has offered as security for credit when 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 that is jointly owed with the debtor.
  • A debtor must disclose being party to a debt agreement if incurring debt again or obtaining goods and services in excess of the threshold.
  • 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 you are able to make your payments on time and are experiencing no difficulty repaying your loans, then debt consolidation may be the best option.

Contact Debt Mediators Australia today to find out more about Debt Agreements.

*Please be advised that any amounts on this website may change slightly from time to time. They were correct at time of uploading 12/04/2016

All Debt Solutions for Australians

For a full listing, see All Debt Solutions, a single-page listing of all debt solutions available to Australians – with short descriptions.

  • Payment strategies: become debt free without restructuring your finances. Often used by financial counsellors, payment strategies work best with credit card debt.
  • Budgeting: if you are struggling with debt, working out your budget before meeting with a debt specialist can speed up your recovery process. Learn how to get back to basics, determine your actual income and work out all of your expenses.
  • Debt Agreements: Debt Agreements put all of your unsecured debts into one pool of debt. Unsecured debts include credit cards, personal loans and store cards. With a debt agreement in place. you can make easy payments on your debt, at a schedule most convenient to you.
  • Debt Consolidation: debt consolidation replaces some or all of your payments with a single regular payment. These arrangements are easier to manage and can even save you money, dude to Australia’s lowered interest rates.
  • Financial Hardship Solutions: Australians suffering from temporary financial hardship (such as an illness or unemployment) can legally request that their creditor changes the loan contract to reflect their hardship conditions.
  • Personal Insolvency Agreements: a legal insolvency agreement where creditors agree to accept a best offer. These agreements are regulated through the Commonwealth agency AFSA and helps give security to both parties in a repayment situation.
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