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Informal Arrangements   

A professional debt management company or credit counsellor can help you structure informal arrangements with creditors to reduce debts or create repayment plans you can live with.  These informal arrangements are not formalised by contract or bound by legislation.  The terms are negotiated directly with creditors. 

Creditors generally welcome the opportunity to negotiate repayment plans with you, so it is best to talk to them immediately you find yourself having difficulty meeting your obligations.  Early intervention prevents more serious problems.   

A debt counsellor can act as an intermediary between you and your creditors, taking the emotion out of a stressful negotiation and contributing knowledge and experience to ensure a fair and workable arrangement is agreed.   

Informal arrangements can be helpful to deal with a temporary crisis such as a period of reduced income due to unemployment, illness or accident; or when unexpected heavy expenses result from an accident, childbirth, etc.  Creditors may offer you more time to pay.  They may agree to reduced installments.  They may reduce interest charges.  If it appears unlikely that they can recover the entire amount of a debt, they may negotiate a reduced debt.  Often, recovering part of the debt is preferred to incurring court or debt collection costs or forfeiting entitlements because you declare bankruptcy. 

With an informal arrangement, the creditor may still notify credit reporting agencies of your situation, but sometimes they will not contact reporting agencies and your credit history may remain clean.   

The drawback of informal arrangements is that they are not protected by court order or legislation, so they rely on the creditors' goodwill. Few creditors will renege on an agreement if you stick to the terms. If you would like a trained debt professional to contact you, use our form below