Debt Agreement Asset Threshold: What You Need to Know
If you are struggling with debt, a debt agreement might be a viable option to consider. One of the important factors to consider when entering into a debt agreement is the asset threshold. In this article, we will take a closer look at the debt agreement asset threshold and what it means for you.
What is a Debt Agreement?
A debt agreement is a legally binding agreement between you and your creditors to repay your debts over a set period of time. This agreement is often used as an alternative to bankruptcy and is available to people who have unsecured debts of less than $118, 782.70.
What is the Debt Agreement Asset Threshold?
The debt agreement asset threshold is the maximum value of assets you can own and still be eligible for a debt agreement. The threshold for 2021 is $231,000. This means that if the total value of your assets is less than $231,000, you may be eligible for a debt agreement.
What Assets are Included in the Debt Agreement Asset Threshold?
The assets that are included in the debt agreement asset threshold are your personal assets such as your car, home, and investments. However, certain assets are excluded from the threshold, such as household items, tools of trade, and superannuation.
Why is the Debt Agreement Asset Threshold Important?
The debt agreement asset threshold is important because it determines whether you are eligible for a debt agreement or not. If your assets are above the threshold, you may not be eligible for a debt agreement and may need to consider other debt relief options.
What Happens if Your Assets are Above the Debt Agreement Asset Threshold?
If your assets are above the debt agreement asset threshold, you may still be able to enter into a debt agreement, but you will need to propose a higher repayment amount to your creditors. Alternatively, you may need to consider other debt relief options, such as personal insolvency agreements or bankruptcy.
Final Thoughts
The debt agreement asset threshold is an important factor to consider when deciding whether a debt agreement is the right option for you. If your assets are below the threshold, a debt agreement may be a viable option to help you manage your debts. However, if your assets are above the threshold, you may need to consider other debt relief options. If you are unsure about your eligibility for a debt agreement, it is recommended that you seek professional advice.
