We are industry leaders at helping people understand their options to Credit Card Debt Consolidation. There are many options to consolidate credit card debt which may include:
- a consolidation loan;
- informal agreement with your creditors; or
- legally binding formal agreement with your creditors (which may be either a Debt Agreement or a Personal Insolvency Agreement)
Consolidating debt can be very complicated and as such we recommend that you only seek advice from industry experts. Not all people are eligible for a Debt Agreement or a Personal Insolvency Agreement and as such you should always obtain advice from an expert.
Are there other methods to consolidate debt?
You can apply to a bank for a consolidation loan and we always recommend this as your first step. If the bank declines your application for a consolidation loan then you may consider the other method of consolidating debt, being either:
How does a Debt Agreement or Personal Insolvency Agreement work?
A Debt Agreement or a Personal Insolvency Agreement are legally binding agreements which you can reach with your creditors. These agreements are regulated under Part IX and Part X the Bankruptcy Act and as such we will need the assistance of a qualified professional to help you set up the agreements. Debt Free or its managing director are fully registered to help set up either a Debt Agreement or a Personal Insolvency Agreement.
Firstly we will assess your capacity to repay your debt by helping you prepare a household budget. Then we will provide you with guidance as to whether we believe your creditors will accept your proposal. If we are reasonably confident that your creditors will accept your proposal we will then prepare all of the necessary paper work for your approval and signature. The benefits of a Debt Agreement or a Personal Insolvency Agreement are significant:
- Interest on your debts will be frozen;
- Any unpaid debt will be legally written off;
- You will only have to make one single payment per month (unless you wish to pay weekly or fortnightly); and
- We will liaise with your creditors for you.
Are there any downsides to a Debt Agreement or a Personal Insolvency Agreement?
Your Debt Agreement or Personal Insolvency Agreement will be listed on the National Personal Insolvency Index which is maintained by ITSA and also the commercial credit reporting agency databases for up to 7 years.