Informal Payment Arrangements

We know, endless phone calls from creditors are enough to drive anyone mad. 

If you want to stop the barrage of calls once and for all without having to agree to lasting consequences, an informal arrangement might be for you. 

Unlike other types of formal agreements that involve some form of legal action, an informal agreement has no negative impact on your credit rating. Not only will it free you from those harassing phone calls, but it will help you pay off your debt faster. 

At Debt Busters, we’re here to help. If you can no longer pay your debt or are struggling to pay it off quickly, an informal payment arrangement may be the best option for you. How does this work and is it the right fit for you? Let’s find out.


  • How Does an Informal Payment Arrangement Work?

    An informal payment arrangement is similar to a debt agreement but isn’t considered an act of bankruptcy. It will freeze the interest on your debts and stop creditors from calling. This means your informal payment arrangement will not go on record or negatively affect your credit file. It’s a positive way to settle debt with your creditors, ensuring that everyone is happy with the final outcome.

    In addition, an informal payment arrangement gives you the time and freedom to settle your debts at a reasonable pace – often at a reduced final amount.

    The process of entering an arrangement is simple. You’ll work with a credit and debt specialist. After reviewing all of your information, we’ll decide if this is the right option for you. If it is, we’ll work directly with your creditors to determine a realistic repayment plan you both can agree to. From there, you’ll start your new repayment strategy.

  • Who Qualifies For An Informal Arrangement?

    Unlike other types of debt solutions, there are no minimum or maximum levels of debt to qualify. In addition, there are no time limits you need to worry about. Your informal payment arrangement could last as briefly or as long as needed, assuming you get approval from your creditors.

    Are you a good fit for this type of arrangement? Ask yourself these questions:

    • You’re facing a sudden change to your financial situation (loss of employment, illness, divorce, etc.)
    • You have a reasonable amount of debt you’d like to repay quickly
    • You’re in a situation where a formal solution might negatively impact your career
    • You’re tired of dealing with debt collection calls


    If you relate to any of the things above, this might be a good fit for you. An informal payment arrangement can be used with a range of debts like secured debts (car loans, mortgages, etc.) as well as unsecured debt (credit cards, personal loans, and government debts).

  • What Are The Types Of Informal Arrangements?

    There are a lot of different types of informal arrangements you might encounter. They come in different shapes and sizes depending on your financial situation. You might pay your debts in a single, lower lump sum or continue with a different repayment plan. Here are the most common types of informal payment arrangements:

    • Short-Term Agreement (Moratorium) – A short term agreement is also known as a moratorium. These agreements either stop or significantly reduce payments and interest over a short period of time up to a year.
    • Long-Term Informal Agreement – A long-term arrangement will likely reduce your minimum repayments, reduce (or freeze) interest, and can last several years.
    • Debt Settlement – If you’re able to repay a lump sum, this can be used to settle any outstanding debts for a lower overall cost known as a debt settlement.
    • Loan Renegotiation – Finally, a loan renegotiation is a way to negotiate the terms of your loan by either reducing your interest rate of the minimum repayment amount.


    You should be aware that informal payment arrangements are only a temporary solution and the terms need to be renegotiated with all of your creditors every 1 – 6 months.

    This is something a debt professional could do on your behalf so you don’t have to worry about it yourself.

  • Does an Informal Debt Arrangement Hurt My Credit Rating?

    There are a lot of misconceptions about how an informal arrangement with your creditors will affect your credit rating. Your credit score could be negatively affected by a number of debt solutions such as formal debt agreements or even bankruptcy.

    The good news is that an informal payment arrangement isn’t likely to hurt your credit rating. Whether or not it makes any impact will depend on your particular creditors and whether they choose to record your informal arrangement with any credit agencies.

    Even if they do report your informal arrangement, this isn’t likely to be as severe as other types of legal financial action. More serious debt agreements or bankruptcy can keep you from getting credit for up to 5 years. An informal debt arrangement should have the least action on your credit score, making it a prime choice for people in need of some help recovering from debt quickly.

  • How Can Debt Busters Help Me With An Informal Payment Arrangement?

    We’ll negotiate on your behalf with your creditors, creating an informal payment agreement that results in a regular and affordable payment plan. Creditors may agree to pause all future interest, consolidate your outstanding amounts and accept a reduced debt settlement, allowing you to pay a single, manageable rate until your debt is completely eliminated.

    If you’re struggling to repay your debts on time or experiencing financial hardship, this might be the right fit for you. Unlike other types of arrangements, this is a low-risk option that allows you to get back on your feet to repay your debts quickly and effectively.

    Are you still not sure about the difference between a formal debt agreement and an informal payment arrangement? Let the Debt Busters team help you today.

    Get in touch now on 1300 368 322 for helpful and expert financial opinions regarding your debt relief solutions.

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Debt Busters is an Australian owned business which was founded in 2005 - since then we have been able to help thousands regain financial control.

Debt Busters prides itself on providing a dedicated Client Service Manager to work closer with you and provide a higher level of customised service about your situation.