Debt Agreement

A Debt Agreement is a binding agreement under Part IX of the Bankruptcy Act 1966 between a debtor and their creditors, where creditors agree to accept a sum of money which the debtor can afford.

A debt agreement is an option to assist people like you that have unmanageable debt, providing a flexible alternative to bankruptcy.

While it may sound complicated, it’s really not because we can do all the work for you!

Debt Agreements can help you to …

  • Combine all of your payments into one manageable amount.
  • Freeze the interest on your unsecured debts.
  • Create a budget so we know what you CAN afford to repay.
  • Stop creditors and debt collectors from contacting you.

It is definitely worth contacting us on 1300 652 175 to find out more about the finer details of a debt agreement, as they can have consequences.

Avoid Bankruptcy is a division of one of Australia’s oldest registered Debt Agreement Administrators, so we can help you navigate the pros and cons to make sure that a debt agreement is the right choice for your unique situation.


  • The ability of the debtor to obtain further credit is affected.  Details may also appear on a credit reporting agency’s records for up to 5 years, or longer in some circumstances. However, if the proposal does not result in a debt agreement being entered, details of the proposal have to be removed from credit reporting agency records.
  • All unsecured creditors are bound by the debt agreement and are paid in proportion to their debts.
  • Creditors cannot take any action against the debtor or property of the debtor to collect their debts.
  • A debtor must disclose that s/he is a party to a debt agreement if incurring debt or obtaining goods and services in excess of the threshold.
  • If trading under a business name or assumed name (whether alone or in partnership) the debt agreement must be disclosed to all people dealing with the business.
  • A debtor who proposes a debt agreement commits an act of bankruptcy. A creditor can use this to apply to court to make the debtor bankrupt if the proposal is not accepted by creditors.
  • The debtor’s name and other details appear on the National Personal Insolvency Index (NPII), a public record, for the proposal and any debt agreement.