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Posted by Revive Financial on Jan 8, 2023 2:01:00 PM

You can get out of debt without declaring bankruptcy. Sometimes debt can become overwhelming, whether your circumstances have changed or you have taken on too many financial commitments. When you face serious financial hardship, you are facing uncertainty, stress and anxiety which can penetrate into other areas of your life such as your relationship, your job and your health.

When you think of unmanageable debt, your mind jumps straight to bankruptcy and all the restrictions and obligations it entails. The possibility of losing the family home and restrictions on your income, assets and lifestyle is a frightening prospect no-one should have to face. Fortunately for many Australians, you can get out of debt without declaring bankruptcy.

In Australia, there are many positive solutions available to get out of debt without declaring bankruptcy. In fact bankruptcy is only viewed as a last resort. There is a positive solution available for people at all stages of debt. If you are struggling with your financial situation, read through the following stages and decide which method is best for you to get out of debt without declaring bankruptcy.

Stage 1. Feeling the Pinch

When you first notice your repayments becoming a little too much to bare, you can tweak your finances and implement a strict budget. By having a handle on your debts, when they are due and how much you need to pay, you become empowered and in control. In the 2013-14 financial year, the most given reason for people entering into debt agreements was due to excessive credit including spending and borrowing. With a budget you will always know exactly where you stand with your finances and you will know what you can or can't afford. Proper budgeting is an essential skill to ensure you can always get out of debt without declaring bankruptcy.

Stage 2. Missing Repayments

So your debt is getting away from you. Not to worry, a debt consolidation loan might give you the time and confidence to get back on track. A debt consolidation loan is a simple way to reduce your interest fees and stress levels before your debt gets out of control. The process involves rolling your debt repayments into one easy-to-manage repayment through refinancing. The debt consolidation loan is enough to pay out your existing debts and all you are left with is one repayment, one loan, one set of fees and interest. A debt consolidation loan is a great way to get out of debt without declaring bankruptcy.

Stage 3. Falling on Hard Times

You never know what life is going to throw at you. You could lose your job, fall ill, sustain an injury or break up with your partner. These circumstances and many more can have an impact on your finances and your ability to repay your debts. Not all banks will sympathise with your change of circumstances and your debts might spiral out of control. Luckily, there is a positive solution for you.


An Informal Agreement is your secret weapon against bad debt. Essentially it is an informal debt agreement between you and your creditors outlining a new repayment schedule better suited to your situation. An Informal Agreement could reduce the amount of your overall debt, pause your fees and interest, increase the time you are given to repay your debt, allow for a lump sum pay out of your reduced debt or a combination of these things. You can use an Informal Agreement to get out of debt without declaring bankruptcy to get you through the difficult time in your life.

Stage 4. Buried in Debt

Your debt is charging on full steam ahead, but you are stuck back at the station still trying to buy a ticket. Your debt is well and truly out of your control and you feel as though there is nothing you can do to stop it. A Debt Agreement might be exactly what you need. A Debt Agreement is a formal arrangement between you and your creditors which is legislated under the Bankruptcy Act.

Much like an informal agreement it allows you to renegotiate the payment arrangement of your debts to a plan that is viable for you. Unlike an informal agreement, a Debt Agreement is a legally binding contract and is therefore considered an act of bankruptcy so it will appear on your credit rating for three years. Once you have repaid your debt agreement you can rebuild your credit file through continuing to make your repayments on time and by avoiding excessive credit enquiries. Debt Agreements were introduced almost 2 decades ago as an alternative to bankruptcy and have helped thousands of Australians get out of debt without declaring bankruptcy.

Get Out of Debt Without Declaring Bankruptcy

If you are looking to get out of debt, you don't have to turn straight to bankruptcy. There are positive solutions available to get out of debt without declaring bankruptcy such as debt consolidation, mortgage refinancing, an Informal Agreement or Part 9 Debt Agreement. If you feel like there is no help available to you, contact Revive Financial and Talk to An Aussie Who Cares. The experienced case managers can help you get out of debt without declaring bankruptcy.

For more information on Bankruptcy, check out our Bankruptcy page here. 

Topics: Bankruptcy, Debt Agreements, Personal Debt, Debt Management Solutions

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