This kind of agreement is often put in place to assist individuals with unmanageable debt, and depending on the arrangement, an individual may make instalments or a lump sum payment for an amount less than the total amount owed to creditors.
At Rapsey Griffiths we’ve worked with many debtors and creditors, advising them in such agreements. There’s an array of details to cover too. For example, an individual’s unsecured debts, assets and after-tax income must be under certain limits to propose a debt agreement.
That’s why it’s vital to have an expert when engaging in such agreements. And, acting early can have a big impact on whether your finances can be ‘turned around’.
Learn more about debt agreements from the ATO.
If your creditors accept a debt agreement your creditors can’t recover the rest of the money you owe once you complete the payments. You will: