Who is it suitable for?


A Debt Agreement is a genuine option for people who can’t pay all of their debts and fall under the requirements of the legislation. You must also be able to make a regular payment without it affecting your ability to meet your living expenses. See below for some specific examples of how a Debt Agreement can really help some people and then there are some examples when a person shouldn’t enter a Debt Agreement.



Mr and Mrs Client had two children and were buying a house which was worth about $360,000. They owed $320,000 on the mortgage. Mrs Client had 1 credit card owing about $8,000.00. Mr Client had a total of 8 credit cards and loans totaling about $85,000.

Mr Client had experienced a large drop in income and was unable to meet all of his payments.

A Part IX Debt Agreement allowed everything to be paid at $280.00 a week for 5 years.

Mr and Mrs Client had no issues with Mr Clients credit rating being affected. They now had a plan that allowed them to keep their home and get Mr Client out of debt.



Ms Client was a young and aspiring professional. She did find herself over committed with 5 credit cards and loans totaling $57,900. She was finding it difficult to manage let alone see her way out of debt with regard to the interest being charged each month just to service the debt.

After discussing her situation with regard to her career and prospects with both her licensing body and some older colleagues she determined that a Debt Agreement would not have the same professional impact that Bankruptcy would have.

Being able to be a director of a company whilst in a Debt Agreement also appealed to her.



Mr Client owed $15,600 among 2 telcos, 2 credit cards, centrelink and 1 insurance claim against him.

Circumstances landed him in this position and due to some of the amounts being demanded from him in full immediately he was unable to pay.

Mr Client understood that he could claim bankruptcy but he strongly believed that he should pay something and a Debt Agreement was proposed that cleared the debt mess and allowed this proud working man to deal with his debts in a way he believed was dignified.


Examples where a Debt Agreement is not the correct solution.


1. The debtor believes that if they go bankrupt they will be prohibited from traveling overseas. The debtor gets talked into a Debt Agreement they either can’t or don’t want to afford. This situation is not ideal for a Debt Agreement.

2. The debtor mistakenly believes a Debt Agreement will be a better thing than Bankruptcy when it comes to their credit rating. This is plain wrong. Both options affect their credit rating for the same period.

3. The debtor proposes a Debt Agreement because they are mistakenly under the belief that if they declare bankruptcy it will not be accepted. This is also the wrong solution and they Debtor is not receiving the correct advice.

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