We’ve talked a bit about debt agreements, and how they can help you recover from excessive debt. But a specific example often makes it easier to understand. So here’s how we helped one of our clients free herself from debt by arranging a debt agreement for her.

“Sarah” worked in the mining industry before she was made redundant. She’s now unemployed, and has been for the past four months despite numerous attempts to find work.

To make matters worse, she has almost $70,000 in debt from various credit cards and a personal loan. Here’s a breakdown of those debts.

Debt Type Debt Amount ($) Minimum Monthly Repayment ($)
Credit Card 1 $8,000 $350
Credit Card 2 $15,000 $450
Personal Loan $40,000 $600
Store Card $6,000 $200
Total $69,000 $1,600

Even after cutting her monthly repayments down to the minimum interest amounts, she still doesn’t have enough money to pay for her day-to-day living expenses.

So she asked us to assess her options.

After looking at her financial situation in detail (including her income level and assets), we concluded that Sarah met the criteria for a debt agreement and should consider entering into one.

She took our advice, and entered into a debt agreement that required her to repay 50% of her debts ($34,500) over four years. (Once a debt agreement is entered into, the interest is frozen.)

Her new monthly repayments are only $718.75 (less than half of what she was originally paying), and after four years she’ll be released from all of her debts.

This is just one example of how we help our clients get out of debt. If you’d like to talk about your options, get in touch with us today for a free, no obligation consultation.