The simple answer is no.
If you enter into a Debt Agreement the legislation is very clear that you are not bankrupt.
Many people will tell you that a Debt Agreement is an “act of bankruptcy” and this is true but it is important to understand that there are many “acts of bankruptcy” that many debtors may have committed but “an act of bankruptcy” doesn’t mean that you are bankrupt. You have to be made bankrupt by your own petition, that is voluntary bankruptcy or declaring yourself bankrupt. Otherwise only the court through the petition of your creditors can make you bankrupt.
So know that you know that a Debt Agreement is not the same as Bankruptcy you are probably thinking whats the difference then?
Firstly, if you are in the situation where you are choosing between the two you really should seek some professional advice because advisers have seen many circumstances and have a greater breadth of knowledge to help you make an informed decision. In saying that you still have to weigh up that what an adviser tells you makes sense based on what you yourself know. If advice doesn’t make sense question it or seek another opinion.
You need to be sure that the advice is being given for you and not to get you to agree to something that better benefits the adviser.
A simple explanation that explains the difference is that with a Debt Agreement you will have an Administrator who (normally) looks after your unsecured creditors and any obligations that a Debt Agreement creates for you, an example is a regular weekly payment. All other aspects of your financial life are left in your control and once the Debt Agreement is valid there are no further thresholds that you are require to abide by apart from the amount of credit you can apply for during the Debt Agreement period without advising the potential creditor.
If you are Bankrupt a Trustee investigates the examinable and financial affairs of yourself during the course of the bankruptcy During this period you are subject to income thresholds along with restrictions in acquiring assets among other things.
For some people the difference will be negligible and either solution will benefit them. For other people the differences will be huge and choosing the wrong option could cause great disadvantage.
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