Debt Agreement (Part 9) Vs Bad Credit

Hi All,
So this is my situation:

I got an injury at work in March 2017 and still under rehab period with Physio until now. My company terminated my job while I injured. They did not pay any compensation for me for the last 3 months so I approached Houndslow Lawyer to help me to get compensation. On 28 of July, the insurer has to give me the accept/reject. If they reject the claim, then my lawyer will push it to court (no win no fee).

My finance situation: I have a total of ~16.5k (Commonwealth, GEM, CreditLine, and Ezipay) of credit and personal loan which I could not pay for the last 3 months since I have no income. Commonwealth already offers 3 months lower interested fee, no late fee, and no collection call until the end of Sept 2017. Only Gem/CreditLine (Latitude Finance) is refused to offer hardship. While I tried to call them and ask for 45-60 days of no collections or delay payment, they refused out of the blue due to I have no income at the moment and I have so many things that I have to pay monthly (my wife is helping me to pay all the bills and groceries for the last few months). They said that I should call them back when my situation gets better and I have some income (It make little sense to me anyway).

My Credit score is just above 500+ point
I have applied for Uber and will get their answer after they completed my Criminal Check. Expected to be next 10 business days.
My first born will be due on September 2017

Now I have 3 options:

  1. Debt Agreement:
    Some companies offer me paying 60-70$/weekly for the next 5 years, kind of consolidated debt. No interest and no collection phone call anymore. After 5 years, my credit report is cleared. Consequences are I have no borrowing power for the next 5 years, I may have some trouble with some employment, I need to request for an oversea trip until the end of my agreement term. Even if I paid out all of the amounts sooner, I still need to serve 5 years of no borrowing power.

  2. Bad credit:
    As Commonwealth offer me a good gesture, I will try to pay them as soon as I can. But for Lattitude, I leave it and accept to be Default. I will also need to serve 5 years of no borrowing power but I no need to pay the money. If I want to, I can use credit repair services to pay some of the debt and get rid of it.

  3. Trying to pay the debt with whatever income I have, from Uber and best cases, from winning the law suit against my previous employer. I still need to pay for the high interest over the time.

And with personal loans like CreditLine and EziPay, how is it affect my credit score and if i pay them out, will my credit score get better faster?

Thank you for reading


  • +3 votes

    Speak to this mob before you do anything


    Default let it go to the collectors put your head in the sand once the debt is sold on to cerdit corp or collection house pay it back at a fraction of the cost


      and ruin your credit rating forever.

      Worst advice.


        The collections agencies can remove it from your history


          why would they?


          @unistudent1: They buy the debt for a few cents for every dollar lets say 10k debt they buy for $100 if they can get you to pay off the debt for lets say 2k they make a huge profit and you get away with not paying the other 8k I knew someone at collection house it is basically how it works.


          You're kind of correct.

          Though, that is the worst advice I've ever heard of.

          I do this for a living. Yes they make a profit (albeit not as huge as you think…but that's another story for another day).

          But that goes against your credit score. I honestly don't know if they can "remove it from your history". That doesn't sound right at all, merely based on the thought: Why would anyone ever worry about a bad credit rating then?

          Anyway, dear OP, please follow my suggestion below if you see fit.

          Best of luck

  • +1 vote

    Contact your superannuation company, you may have income protection or debt protection.


      I already checked. No Income Protection, just TPD which i believe i have to Permanent disable to be able to claim

  • +1 vote

    Chumlee is right go see a free financial service first they'll help you and it's free. Also, Latitude is obliged to help you.

    Under the UCCC, borrowers can apply for changes to their credit contract on the grounds of hardship: see s66–68.6 Section 66(1) provides that:

    A debtor who is unable reasonably, because of illness, unemployment or
    other reasonable cause, to meet the debtor’s obligations under a credit contract and who reasonably expects to be able to discharge the debtor’s obligations if the terms of the contract were changed in a manner set out in subsection (2) may apply to the credit provider for such a change.

    The three options under s66(2) for changing the terms of the contract are:

    • Extending the period of the contract and reducing the amount of each payment due under the contract accordingly
    • Postponing during a specified period the dates on which payments are due under the contract, or
    • Extending the period of the contract and postponing during a specified period the dates on which payments are due under the contract.

    If the credit provider does not change the contract in accordance with an application made by a borrower, the borrower may apply to a relevant court or tribunal to change the terms of the contract: s68.

    Here's some good betime reading while you're recovering ASIC - Helping home borrowers in financial hardship


      Thanks so much for shring this - intersting! I always knew that was the case, but never knew the relevant law!


    Latitude, good luck with that one, FSO would be my first point of call


    Latitude/GE are absolute morons. If they are refusing hardship assistance, which they legally have to, I would be speaking to the financial ombudsman.

    To answer your question in a literal sense though, I'd go a bad debt over a debt agreement IMO. You can still obtain finance on a bad debt. A debt agreement is essentially the same as bankruptcy and stuffs you up for 5 to 7 years

    Have you spoken to your super fund about income protection? Seems like you would be eligible

  • +1 vote

    Hi, I can assist.

    You need to call the other banks Lattitude etc again. I know, because this is what I do for work.

    Many times it just depends on teh behaviour/attitude/knowledge of teh operator on the phone (Unfortunately). So call them again, re word your sitaution and apply for hardship. They are obliged to help you. The nicer you are, the more likley they are to help you. So please be nice!.

    The second thing is that, you should speak to free financial counselling as was mentioned above.

    The third thing is (common sense): Cut back on expenses, apply for clink if you're eligible, continuen to actively seek work

    The fourth thing is to NOT BORROW ANYMORE. Under any cirumstances, do not borrow.

    That's all I can think of for now. Best of luck - it will all blow over eventually. Don't freak out!
    Trust me…I do it for a living! Just take ownership of this debt and be proactive.


      Thank you for your advice.

      I called Lattitude and when my teh operator refused my hardship, I request to have an Internal Review (as suggest from Finance Counsellor). They switch me to his supervisor and she was even worse than the teh operator. She said that she can't do anything and I need to call back when my situation gets better (Income or win the case). And until then, all my debt is still under effect of full interest and risking default.
      I have no intent to borrow any more. I actually don't have any debt before marriage…ironic eh?
      And back to the question, should i go default?


        No, get in touch with the Financial Ombudsman. GE/Latitude have always been pricks. They are denying you your legal right for legitimate hardship assistance. You can reach them on 1800 367 287. While an active case is open and in arbitration, interest should be frozen.


        No don't go into default.

        Call GE again. Raise a complaint with their Dispute resolution team. Threaten ombudsmen action. Ask for employee staff number and details (BUT BE PATIENT AND CALM WHEN YOU DEAL WITH THEM). Be firm, but patient.

        It's sad to hear Latitude is being so difficult.

        Tell them, legally they are required to provide financial assistance.

        Ask the matter to be raised and keep on, keeping on! You'll get there.

        In the mean time, speak to a financial counsellor if you havne't already, they may be able to fofer some more advice.


    There is an ad for capfin on this page. How convenient .

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