Informal Agreements

An informal agreement is a simple way for you to come to an arrangement between you and your unsecured creditors.

Informal Agreements can be a flexible way to come to an arrangement to settle debts without becoming bankrupt or committing an act of bankruptcy.

• One payment in line with your pay cycle that you can afford.
• Better control over your debt.
• Expert assistance to negotiate with your creditors.
• No more creditor’s calling.

It depends on the agreement we negotiate with your creditors, but it’s usually between 3 to 5 years. Contact Debt Buddy to discuss how long the informal agreement will last.

You can lodge an informal agreement proposal through DB if you:

• Have unsecured debts more than a set amount.
• Can afford the proposed payments.

Informal agreements are not:

• consolidation loans or agreements to borrow money.
• able to release you from all types of debts – some debts you will still need to pay. Such as child support and some traffic fines. You must continue to pay your  secured debts such as home loans and car loans.

1. Gather the requested documentation pay slips, bank statement, credit card statements etc.
2. We will prepare your paperwork. You need to read, understand, sign and send back to Debt Buddy for us to lodge with your creditors.
3. You will commence making payments to us (as agreed) and we will pay your creditors for you.

If creditors included in your informal agreement continue calling you, refer them to your case manager on 1800 332 877 and tell them you have an informal  agreement with Debt Buddy. We advise your creditors to contact us and not you.

• Your creditors may suspend or cancel your credit facilities while continuing to charge you interest and fees.
• We will send a copy of your informal agreement to your creditors and negotiate with them on your behalf.
• We will ask your creditors to write off future interest and, in some instances, accept a discounted amount in satisfaction of their debt.
• Your creditors will respond with a yes, no or counter our offer.
• We will work with you to ensure we are setting up an arrangement based on what we both agree is affordable

• Provide information: you need to provide the information we request making sure it is accurate and current. It is critical that you are honest and disclose all relevant information about your situation.
• Read, understand & sign paperwork: To propose an Informal Agreement you will need to read, understand and sign a number of documents which are legally binding. You will need to read through all documents carefully and thoroughly, so you are fully informed.

You should notify us immediately so we can discuss the options you have depending on your circumstances. We are here to help.

•  Through a direct debit form your nominated bank account.
• In line with your pay cycle (weekly, fortnightly or monthly).
• At the agreed amount.

We do not notify your employer. It Is unlikely an informal agreement will affect your employment.

If your creditors accept your informal agreement proposal you can achieve one manageable payment for your informal agreement that is based on affordability with no interest, no card servicing fees, no over limit fees or penalty fees (subject to creditor approval).

Improved control of your finances, you will know exactly how much to pay each week, fortnight or month. Knowing when your agreement will be finalised.

If you complete your informal agreement, you will become unsecure debt free.

It is up to each one of your creditors. There is no guarantee your credit report won’t be negatively affected.

There are two fees in total.

REMINDER: Your payments are based on affordability, and we will not pressure you to make a payment you cannot afford.

FEE #1

• Debt Buddy set up fee: This is for all the work involved in setting up your application. This is paid by installments (normally over 10 weeks) that are based on affordability and not refundable.

FEE #2

• Debt Buddy Administration Fee: Debt Buddy will collect this fee as a percentage of each informal agreement payment you make only when and if your Informal Agreement is accepted. This fee is included in your informal agreement payment amount. It is an amount
  withheld to administer your informal agreement over the duration of your proposal.