Debt Agreement - How a Debt Agreement Can Help with Debt Relief
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Debt Agreement - Helping a Young Couple
A husband and wife were as they put it “up to their eyeballs in debt”. With 2 credit cards, 2 store cards and a personal loan, they owed in excess of $30,000 in high interest debt. Their debt seemed to be spiraling out of control and their lives along with it. Then the husband lost his job in manufacturing due to cutbacks related to the global financial crisis. This brought the crisis home and made it far more personal.
The wife's income simply could not cover the mortgage, living expenses and repayments towards credit card debt, store card debt and the personal loan. Their expenses exceeded their income and they could not pay their debts as and when they fell due – i.e. they were ‘insolvent’.
How we Helped the Young Couple
Australians are accustomed to relying on the Australian Lending Centre to help them get out of debt. When the young couple approached us with their all too familiar story we had a registered debt agreement administrator immediately help them onto the path to get out of debt. A debt agreement was lodged and the interest on their debt was frozen. Their creditors agreed to allow them to pay back the money over 4 years and they accepted 70 cents in the dollar to settle the debt once and for all.
Debt Agreement - Helping a Single Lady
Her problems with debt started when she made some unnecessary purchases along with relying on credit cards when times got tough to make ends meet. With a personal loan, two credit cards, two cash advances and a tax bill, she was a little over $20,000 in debt. To service this debt, she had to pay nearly $1,000 per fortnight. She was only earning around $1200 per fortnight (after tax) but also had to pay for her share of the rent ($100 per fortnight) and the running costs of a car, along with her other living expenses. Needless to say, her fortnightly expenses exceeded her fortnightly income, and she had 'maxed out' her credit cards and fallen behind on her loan repayments. She needed help.
How we Helped Her
She contacted the Australian Lending Centre looking for debt relief and we immediately had a registered debt agreement administrator look into her circumstances. As she was insolvent (unable to pay her bills as and when they fell due) an accurate budget was prepared and a debt agreement was lodged with the Australian Government to present to her creditors to vote on. The majority of her creditors voted 'yes' on the debt agreement proposal and she was able to pay her creditors back over 3 years at a rate of 74 cents per dollar owed to satisfy the debts once and for all. By doing so, her required payment towards servicing her debt went from around $1,000 down to $280 per fortnight - a saving of over $675 per fortnight.
Needless to say she was thrilled when she heard about this. These days, the additional cash flow can be put towards more efficiently managing her finances (for example, she has an account for 'emergency funds' if needed), and she sticks to her budget and has control over her personal finances.
DEBT AGREEMENT QUICKLINKS
Debt Agreements - What is Debt Agreement
Debt Agreements - How to Apply for a Debt Agreement
Debt Agreements - Benefits of a Debt Agreement
Debt Agreements - Examples of Debt Agreements
Debt Agreements - Who Can Enter a Debt Agreement
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