Debt Agreement Nz

Debt Agreement NZ: What You Need to Know

If you are struggling with debt in New Zealand, you may be considering a debt agreement as a possible solution. But what is a debt agreement, and how does it work? In this article, we will explore the basics of debt agreements in New Zealand, as well as the pros and cons of this debt relief option.

What Is a Debt Agreement?

A debt agreement is a formal arrangement between a debtor and their creditors that sets out a manageable payment plan to repay the debt. It is an alternative to bankruptcy and is designed to help people who are struggling with their debts to get back on track. Debt agreements are regulated by the New Zealand Government through the Insolvency and Trustee Service (ITS).

How Does a Debt Agreement Work?

To enter into a debt agreement, you must:

– Have unsecured debts of less than $200,000

– Be insolvent (unable to pay your debts as they fall due)

– Have a regular income

– Be able to make regular payments towards your debt

If you meet these criteria, you can work with a debt agreement provider to negotiate a payment plan with your creditors. This plan will set out how much you will pay, and over what period of time. Once your creditors agree to the plan, you will start making payments to your debt agreement provider, who will distribute the payments to your creditors.

Pros of Debt Agreements

There are several benefits to debt agreements, including:

– A debt agreement can help you avoid bankruptcy, which can have serious long-term consequences.

– A debt agreement can help you manage your debts and get back on track financially.

– A debt agreement can provide you with some relief from debt collection calls and letters.

– A debt agreement can help you protect your assets, such as your home or car, from being seized by your creditors.

Cons of Debt Agreements

There are also some downsides to debt agreements, including:

– Your credit rating will be affected by a debt agreement, which can make it harder to get credit in the future.

– Debt agreements can be expensive, with fees charged by debt agreement providers and potentially higher interest rates on your debts.

– Debt agreements can last for several years, which can make it difficult to plan for the future.

– Not all debts can be included in a debt agreement, so you may still be left with some debts to manage.


If you are struggling with debt in New Zealand, a debt agreement may be a viable option to help you get back on track. However, it’s important to weigh up the pros and cons before you make a decision. If you are unsure whether a debt agreement is right for you, seek independent financial advice to help you make an informed decision.

Posted by