For people struggling to manage personal debt and feeling there is no light at the end of the tunnel, Bankruptcy may appear to be the only solution. The stress caused by having serious money problems can be overwhelming and like a cancer, it spreads affecting relationships. It's generally accepted that money issues are the number one cause of marriage breakdowns, so it's no wonder that bankruptcy can appear a welcomed relief to this money stress.

Whilst its true many problems disappear under bankruptcy, all too often they are replaced by other equally stressful problems.

For starters, there is no escaping the personal stigma attached to being a bankrupt. In our society, thanks to the archaic practices of days gone by, bankrupts are shunned and often seen as untrustworthy. Even though the names of bankrupts are no longer printed in national papers these days, there is no escaping the shame that most people feel when it comes to declaring bankruptcy.

An additional consequence of being bankrupt is that you lose your financial independence. A Trustee is appointed to investigate your financial position and determine what you can own, earn and whether or not you will be required to pay your debts (albeit at a reduced rate). Suffice it to say, this process can be extremely intrusive and demeaning.

Being a bankrupt can also impact on your future career aspirations and goals because there are certain jobs you can do and certain jobs you can't do. For instance, many jobs that require you to be a part of a professional association or hold a license ask whether you've been a bankrupt in the application and if so, can reject your application on those grounds. Apart from this, you are allowed to keep very basic assets such as a car to the value of around $6500 and normal household effects. For people with assets they've worked hard for, this can be devastating.

For more on the consequences of Bankruptcy, you should contact the Insolvency and Trustee Service of Australia.

Fortunately, for people struggling with debt that prefer not to be a bankrupt, there is an alternative.

A Part IX Debt Agreement (or simply known as a Debt Agreement) provides people struggling to manage their finances with an opportunity to settle their debts at an affordable rate, avoiding the stigma and invasive consequences of bankruptcy. Essentially, a Debt Agreement is a legally binding settlement or repayment arrangement with creditors allowing debtors to settle their debts over a short period of time.

Of course there are consequences and benefits attached to doing a Debt Agreement, like any option. For instance, people under a Debt Agreement will become credit impaired (if they are not already) - making it difficult for them to obtain a credit card or any other form of debt for a period of time. For many, a break from debt would probably be a welcomed relief.

More importantly for people considering Bankruptcy, a Debt Agreement provides a real alternative to the stigma attached with being a bankrupt. Under Bankruptcy a debtor would more often than not walk away from their debts however under a Debt Agreement you reach a mutually acceptable compromise.

For more information relating to Debt Agreements you should contact the Insolvency and Trustee Service of Australia or a registered Debt Agreement Administrator.

The truth is that the vast majority of people that find themselves with unmanageable debts do not want to walk away from their debts, pay nothing, leaving their creditors high and dry. Most people want to pay their debts but for circumstances often beyond their control, they can't. For this reason, a Debt Agreement may provide a suitable solution.