Debt Agreement (DA)

Pros and Cons

Not everyone qualifies for a DA

  • Your individual assets must be less than $280,025.00. (if you are buying a house this is only for your equity, not a spouse partner etc).
  • Your unsecured debts must be less than $140,012.00
  • Your income must be less than $2,019.00 (after tax) per week.
  • You can’t have been bankrupt or in a DA within the previous 10 years.

You need to be able to pay something meaningful. This doesn’t mean you will have to pay the total of your debt to clear your debt but you must be able to make a payment of some sort.

The payment you do make is based on what you can afford, It is not based on what you owe.

Your credit score will be affected. People who do DA’s do so to get out of debt. This is the price they are willing to pay to get all of the benefits below (including being Debt Free). When your credit score is reinstalled it will be back to normal and there will be no trace of the DA.

You will only have to make one regular payment to cover all unsecured debt’s.

Interest will be Frozen.

You will be out of Debt between 3 and 5 years.

Credit Score returns to perfect.

No more phone calls, legal letters or impossible demands.

A legislated debt solution that is a real plan to get out of debt.

Our policy is that you are not allowed to pay back (this also includes all fee’s) more than you owe. Example, If you owe $44,500.00 in unsecured debt, the total amount you repay must be less than $44,500.00. You may however pay much much less than you owe today, you need to contact us to get a free assessment. You will save many thousands, maybe tens of thousands in Interest.

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Debt Agreement (DA) FAQ’S

What happens to my debts?

When you make a DA, most of your unsecured debts are “frozen”. This means all the interest, service fees, etc stop.  You must disclose all your debts.

Do my creditors have to accept my DA proposal?

No. The creditors will accept your proposal if they consider it reasonable. To be accepted, a majority of your creditors (in value) must agree to it. In this case it becomes binding on all creditors, including those that don’t/won’t agree.

How do creditors get paid?

Your debt payments are consolidated into one payment which you pay to the Administrator. The administrator pays your creditors over time, usually every three months until you have paid the payments as per the DA.

Full and accurate disclosure of all your debts is required by law. Creditors will vote to reject a proposal where undisclosed or understated debts exist. You also risk committing an offence under the Bankruptcy Act if you mislead your creditor’s.

Can I keep my car and other property?

If you have a car under finance (secured) and you want to keep the car, you must continue your payments to this contract. Unlike Bankruptcy you are allowed to keep all your possessions and there is no selling of assets.


What happens if I stop paying the DA?

If you stop paying your Debt Agreement, it could be terminated / cancelled. Creditors can elect to terminate a DA if they are dissatisfied with its performance. If the DA is cancelled, the debts are revived, and creditors will resume collection adding interest, fees and charges to their debts. If you fail to make a payment for 6 months after a payment is due, the DA is automatically terminated.

If my situation changes, can I change my DA?

The terms of your DA can be varied if your creditors agree to the change. Your creditors will only accept changes to your DA if they consider it reasonable. A variation to a DA will be accepted if a majority (in value) agree to the changes.

Will you speak with my creditors?

Yes. We will contact your creditors and request they only contact us.

Can I pay my DA off sooner?

Yes. There is no financial penalty to paying the DA early.

What happens with Joint Debts?

If a debt is in joint names and one of the debtor’s is in a debt agreement, the coborrower/Guarantor continues to be liable for the whole of the debt.

Can I get a loan while I am in a DA?

It will be difficult.

If you are not on a mission to get out of debt then a DA is not your best option.

Can I get a home loan in the future?

Yes, as long you meet the lending criteria.

Can I continue to work in my job?

Most people’s employment is unaffected. If there is a special condition or you need a special licence to work in your chosen industry it is your responsibility to ensure that a DA will not impact your employment.

Can I be self-employed?

Yes, but you need to be aware of the restrictions and/or conditions that apply with using a business name other than your own. Speak to us to get clear advice.

 Do ATO debts get included in the DA?


 If you have a Tax debt and you are in a DA, the ATO can withhold the refund and offset this against your Tax debt.

We will cover exactly how this works with you.

Feel free to call our Licensed Debt Agreement Administrator, Keith Dorahy, direct on 0404 936 697.


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